Effect of Profitability and Financial Leverage on Capita Structure in Pakistan Textile Firms

Abstract

This study concentration the effect of profitability and financial leverage on capital structure in Pakistan textile firms. This study is based on selected 10 listed KSE textile firms the data for the period 2009 to 2014. Estimated regression model and correlation between the financial leverage and profitability on capital structure. According to our finding there is negative relationship between capital structure and profitability and positive relationship between capital structure and financial leverage if the financial leverage is increase the profitability is decrease and vice virsa there have negative correlation.

Keywords: Capital Structure, Profitability, financial leverage