Impact of Capital Structure on Firm's Financial Performance: Cement Industry of Pakistan

European Journal of Business and Management, Vol.8, No.4, 2016

5 Pages Posted: 31 May 2016 Last revised: 11 Oct 2016

See all articles by Nawaz Ahmad

Nawaz Ahmad

RTS (Research, Trainings, and Solutions); Institute of Business Management (IoBM)

Mohsin Ali

Institute of Business Management (IoBM), Students

Multiple version iconThere are 2 versions of this paper

Date Written: February 29, 2016

Abstract

This research is an attempt to gauge the impact of capital structure (leverage) on the financial performance of companies listed on the KSE in the cement sector. The data was extracted for a period of seven years from 2009 – 2015. The total firms listed in the sector are 18 out of which data for the period selected is available for 14 firms which are used for study. Correlation and Ordinary Least squares models are used in this study for testing the hypothesis. The results show that leverage measured by Debt to Assets has a statistically significant negative impact on firms’ financial performance measured by Return on Assets at 99.9% confidence interval.

Keywords: Financial Leverage, Capital Structure, Firms' Performance

JEL Classification: C12, G32, L74

Suggested Citation

Ahmad, Nawaz and Ali, Mohsin, Impact of Capital Structure on Firm's Financial Performance: Cement Industry of Pakistan (February 29, 2016). European Journal of Business and Management, Vol.8, No.4, 2016 . Available at SSRN: https://ssrn.com/abstract=2786099

Nawaz Ahmad (Contact Author)

RTS (Research, Trainings, and Solutions) ( email )

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9th Nishat Lane, DHA 6
Karachi, Sindh 75500
Pakistan
00923009292422 (Phone)

Institute of Business Management (IoBM) ( email )

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Korangi Creek
Karachi, Sindh 75190
Pakistan

HOME PAGE: http://www.faculty.iobm.edu.pk/staff/nawaz-ahmad/

Mohsin Ali

Institute of Business Management (IoBM), Students

Plot 84
Karachi
Pakistan

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