An Evaluation of Capital Structure Influencing on Profitability: An Evidence of General Industrial Sector Listed in KSE

Abstract

The objective of this research paper is to an Evaluation of the Capital Structure Influencing on Profitability regarding General Industrial Sector and to ascertain the association ship and most influential variables that effect on Profitability. Method of sampling was used in Simple Pooled Regression Model technique taking samples of the 9 companies listed (General Industrial Sector) on the Karachi stock exchange for the periods of 11 years (2005-2015). The results showed that Capital Structure (Debt-Equity) has significant influence on Profitability such as (Return on assets, Return on equity, Return on Capital Employed and Net Profit Margin). Association betwixt Capital Structure (Debt-Equity) has negative with profitability (Return on Assets, Return on Capital Employed and Net Profit Margin) and Return on Equity is positive association with Debt-Equity. All variables are influential and significant to the Capital Structure regarding General Industrial Sector. This research paper will assist for the assessment of the capital structure regarding various sectors which is listed in the Karachi Stock Exchange.

Keywords: Capital Structure, Profitability, Karachi Stock Exchange, Simple Pooled Regression