Determination of profit and loss sharing ratios in interest-free business finance
Other Title(s)
العوامل المحددة لنسب المشاركة في الربح و الخسارة
Author
Source
Journal of Research in Islamic Economics
Issue
Vol. 3, Issue 1 (31 Dec. 1985), pp.13-29, 17 p.
Publisher
King Abdulaziz University Scientific Publishing Center
Publication Date
1985-12-31
Country of Publication
Saudi Arabia
No. of Pages
17
Main Subjects
Topics
Abstract EN
Current models of profit-and-loss-sharing (PLS) financing assume that the ratio in which profits are shared may be different from the ratio the financier's capital bears to the total capital of the firm, which is the ratio in which losses must be shared.
This can be better justified as a growth promoting policy than as an instrument for ensuring distributive justice.
In a system where interest and PLS financing co-exist, the aggregate profit-sharing ratio is a function of the overall rate of return on investment, rate of interest, degree of leverage, and risk premium.
PLS financing is more profitable to financiers in the long run than interest financing.
American Psychological Association (APA)
Hasan, Zubayr. 1985. Determination of profit and loss sharing ratios in interest-free business finance. Journal of Research in Islamic Economics،Vol. 3, no. 1, pp.13-29.
https://search.emarefa.net/detail/BIM-436011
Modern Language Association (MLA)
Hasan, Zubayr. Determination of profit and loss sharing ratios in interest-free business finance. Journal of Research in Islamic Economics Vol. 3, no. 1 (1985), pp.13-29.
https://search.emarefa.net/detail/BIM-436011
American Medical Association (AMA)
Hasan, Zubayr. Determination of profit and loss sharing ratios in interest-free business finance. Journal of Research in Islamic Economics. 1985. Vol. 3, no. 1, pp.13-29.
https://search.emarefa.net/detail/BIM-436011
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references : p. 28
Record ID
BIM-436011