Relationship between Indebtedness and profitability in industrial manufacturing companies in Ecuador

Irene Buele Nugra, Leonel Dominguez, Diego Alvarez


Manufacturing companies oversee converting raw materials into finished products, characterized by the intervention of machinery and labor force. The article analyzes, through correlation of variables, the relationship between indebtedness and profitability of a group of companies in the Ecuadorian manufacturing sector.  The results showed an average debt ratio of 332.70%, which indicates that most of the companies work with money from suppliers or with credits offered by financial institutions. The return on investment shows an average of 113.57%, which indicates that the companies have excellent earnings in terms of what they invest in their economic activity. Correlational analysis showed little or no relationship between return on equity and debt ratio at 21.9%. Likewise, a weak negative relationship between profit margin and indebtedness was evidenced with a -42.4% correlation.  In conclusion, the research data indicate that the manufacturing companies have not improved their profitable level by making adequate use of debt. 


correlation; financial análisis; income; indebtedness; profitability.

Full Text:



Chaverra, D. (2019). Acrlatinoamerica. Retrieved from 19 de March de 2021, de Informe revela desaceleración en manufactura global durante 2018:

Garzón, N., Kulfas Palacios, J., & Tamayo, D. (2016). Ecuador en cifras. Retrieved from 10 de June de 2020, de INEC:

Superintendencia de Compañías Valores y Seguros. (2019). Investigacion y Estudios. Retrieved from 10 de April de 2020, de Estudios Sectoriales:

Florez, S. (2011). Universidad Libre Seccional Pereira. Retrieved from 10 de June de 2020, de Repository:

Garcia, V. (2015). Análisis financiero: un enfoque integral. Grupo Editorial Patria.

Domaracká, L., Taušová, M., Shejbalová, M., & Albert, M. (2020). The Indebtedness According to the Property Structure with Respect to the Sector Type. En New Approaches in Management of Smart Manufacturing Systems (págs. 39-53). EAI/Springer Innovations in Communication and Computing. Retrieved from 15 de August de 2021, de

Sánchez, J. (2002). Ciberconta. Retrieved from 5 de June de 2020, de Analisis de Rentabilidad de la empresa:

Navas, M., & Jiménez, A. (2011). Análisis contable y financiero. IC Editorial.

Majumdar, R. (2018). Indebtedness in Non-Group Affiliated Indian Manufacturing Firms: An Analysis of Borrowing Behavior. IUP Journal of Applied Finance, 24(2), 21-44. Retrieved from 20 de August de 2021, de

Grau, A., & Reig , A. (2021). Operating leverage and profitability of SMEs: agri-food industry in Europe. Small Business Economics, 57, 221–242. Retrieved from 30 de June de 2021, de

Riquelme, M. (2019). Webyempresas. Retrieved from 11 de May de 2020, de ¿Qué es y cómo se interpreta el coeficiente de correlación de Pearson?:

Cabrera, E. (2009). El Coeficiente de Correlación de los Rangos de Spearman. Habanera de Ciencias Médicas, 8(2), 1-19. Retrieved from

Empresa Actual. (2016). Retrieved from 20 de May de 2020, de Escuela financiera: el ratio de endeudamiento:

Majumdar, R. (2018). Indebtedness in Indian Manufacturing Firms: The Evidence Revisited. South Asian Journal of Management, 25(2), 189-213. Retrieved from 15 de September de 2021, de



  • There are currently no refbacks.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Open Science Journal (OSJ) is multidisciplinary Open Access journal. We accept scientifically rigorous research, regardless of novelty. OSJ broad scope provides a platform to publish original research in all areas of sciences, including interdisciplinary and replication studies as well as negative results.