The financial structure and its impact on the profitability of manufacturing industries registered with the Superintendency of Companies, Securities, and Insurance of Ecuador in 2024

Abstract

The relationship between leverage and profitability in Ecuadorian manufacturing firms presents a relevant issue, as there is no consensus on whether the use of external financing improves or deteriorates financial performance, especially in contexts with high credit costs and restricted access to financing. The study analyzes the relationship between financial structure and the profitability of industries registered with the Superintendence of Companies during 2024, with the objective of determining whether there is a statistically significant association between the level of leverage and ROE. For this purpose, a quantitative approach with a non-experimental, cross-sectional design was employed, applying Spearman’s coefficient due to the non-normality of the data. The final sample included 5.537 firms, classified into quartiles according to assets. The results show a heterogeneous relationship: in the first quartile the correlation was moderately positive (ρ=0,308), in the second weak (ρ=0,189), in the third not significant (ρ=0,046), and in the fourth weak but significant (ρ=0,122). It is concluded that the effect of leverage on profitability is not uniform and depends on firm size, which suggests that leverage should be managed strategically, considering the conditions of the Ecuadorian financial environment.