IMPACT OF CAPITAL STRUCTURE ON PROFITABILITY EVIDENCE FROM ELECTRICITY, OIL & GAS AND ELECTRONIC & E

日期 : Sep 2016 - Jul 2017

This study investigates the impact of capital structure and profitability. Current study uses Short Term Debts to Total asset, Long Term Debts to Total Asset. Funded Debts Ratio, Current Debt Ratio, Debt to Equity Ratio, Growth or sale and Size or Total Asset of the company as independent variables and Return On Asset of the company as dependent variable to examine the impact of capital structure on profitability. Study based on Electricity, Oil & Gas and Electronics & Electrical Goods, twenty four companies was selected listed in Pakistan Stock Exchange PXE during the period 2010 to 2016. Secondary data is collected through financial statements of the companies. STATA 12 is used for the descriptive statistics analysis and different tests. The result shows that both positive and negative relationship was found between the variables. The DE, CD, SIZE and GROWTH have positive relationship between the profitability while LTDTA and STDTA having negative relationship with profitability. The present study is unique contribution in the existing literature of finance in the context of emerging market like Pakistan.