Leverage Risk. The Weight of Borrowed Capital Distinguishes the Solvency of Firms: An Empirical Analysis on a Sample of 4,500 Italian SMEs

  •  Marco Muscettola    


The analysis of the financial structure of firms is crucial in order to investigate their possibilities of profitable progress or, on the other hand, their probability of default. In this perspective, the aim of this work, which is supported by a large analysis sample, is to describe the structure of onerous debt in Italian SMEs and to decipher the possible links between it and the probability of default. We therefore intend to answer two questions: can insolvent firms be identified by analysing only the weight of financial debts? Is it possible to isolate a risk of leverage among the dangers leading companies to bankruptcy?

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