Impact of Capital Structure on Firm’s Financial Performance: Textile, Automobiles, Sugar, Petroleum & Engineering Industry of Pakistan

Abstract

The purpose of this study to measure the impact of capital structure (leverage) on the financial performance of listed companies in the sector of Textile, Automobiles, Sugar, Petroleum and engineering industry of Pakistan. The data was collected for the period of four years from 2012-2015. The data was extracted from the 21 firms for study. The Ordinary least squares models and Correlation are used for analysis the proxies. The results display that leverage measured by Debt to Assets has a statistically significant negative effect on firms’ financial performance measured by Return on Assets at 99.9% confidence interval.

Keywords: Financial leverage, Capital Structure, Firms’ performance.