The effects of leverage on profitability in Vietnamese shipping listed companies

In order to identify whether “The financial leverage has an impact on the profitability of shipping enterprises or not?” we will have recommendations, to ensure financial safety and sustainable development for shipping enterprises. This research uses the generalized least squares method (GLS) to verify the relationship between the finance's leverage (DA) and the operating performance (ROA). Panel data from 25 listed companies on 3 stock exchanges in Vietnam, namely HOSE, HNX, and UPCoM, which are operating in shipping, from 2014 to 2022. The variables of this paper are return on assets (ROA), total debt to total assets (DA), company size (SIZE) and company growth (GROWTH), intangible fixed assets (INTANG), and short-term assets/short-term earnings (LIQ). Research results show that the ratio of financial leverage has a negative relationship with ROA, and if a business uses more debt, it has bad results in its business performance. In addition, long-term businesses will have a higher financial leverage ratio.