Intangibles Related Ratios and their Relationships with Leverage

• Main Author: Zhong, Larry
• Format: Others
• Published: Scholarship @ Claremont 2013
• Subjects: intangibles; leverage; debt; capital stracture; Accounting; Finance and Financial Management
• Online Access: http://scholarship.claremont.edu/cmc_theses/755; http://scholarship.claremont.edu/cgi/viewcontent.cgi?article=1805&context=cmc_theses

Intangible assets have been the increasingly dominant primary source of market value creation. This paper investigates the relationship between leverage and various intangibles related ratios. An empirical analysis is conducted to quantitatively understand the impact that these ratios have on leverage. The results show that intangible assets have a clear significant positive relationship with leverage. Accounting based principles are used to provide reasoning behind the results, which include the difference in impact that internally generated intangible assets and acquired intangibles have on leverage.