earticle

영어

Actually, adequate debt ratio would be different according to the characteristics of firms or industries. If costs and benefits to use debt are dissimilar in the companies, even their acceptable debt ratios would be varied. It is absolutely desirable to raise debt when the benefit is bigger than the cost. However, those are decided by growth, profitability, and financial cost. For example, the higher sales to capital and income to sales are, the more return on investment is, and then the lower financial cost to debt is, the less the burden of debt is. Therefore, it is necessary to draw suitable debt ratio by each industry considering its environmental feature. In this context, for shipping corporate is more sensitive to the government policy about debt administration than other industries, the comprehensive model should be established including total asset turnover, degree of debt burden, profit to sales, and so on. It would be one of the timely thesis to deduct, through this model, optimal debt ratio in shipping industry. To conclude, this study is a kind of trial approach to demonstrate an analytic model enable to estimate the ratio by using the empirical data hereafter. It would perform a role as a suggestion to improve the industry.