The Role of Capital Structure on Firm’s Profitability of Listed Cement Sector in Pakistan Stock Exchange

Rehan, M., Alvi, J., & Khatri, S. (2019). The Role of Capital Structure on Firm’s Profitability of Listed Cement Sector in Pakistan Stock Exchange. Saudi Journal of Economics and Finance, 3(3), 107-116.

20 Pages Posted: 17 Sep 2020

See all articles by Muhammad Rehan

Muhammad Rehan

Gaziosmanpasa University - Faculty of Economics and Administrative Sciences

Jahanzaib Alvi

​Mohammad Ali Jinnah University; IQRA University

Saad Khatri

​Mohammad Ali Jinnah University

Date Written: March 30, 2019

Abstract

The main purpose of this research is to find out the relationship between capital structure (debt-equity) as and Profitability of the listed cement companies in Pakistan Stock Exchange. Further specific objective is to find out relation of debt equity with gross profit, earning per share, and return on capital and return on equity. The sample is taken from 10 cement companies which are listed on Pakistan stock exchange. The secondary data is taken from 2011 to 2018 (i.e. 8 years). Mean and standard deviation of all ratios and Pearson product correlation analysis is performed with the help of Eviews 9 to find the relationship between capital structure and profitability. This research determines that debt / equity (Capital Structure) is adversely linked with the profitability, it suggests that decrease in the profitability of the organizations is due to increase in debt capital & vice versa

Keywords: Capital Structure; Profitability, Return on Assets, Return on Capital Employed, Pakistani Cement Listed Firms

JEL Classification: G32

Suggested Citation

Rehan, Muhammad and Alvi, Jahanzaib and Khatri, Saad, The Role of Capital Structure on Firm’s Profitability of Listed Cement Sector in Pakistan Stock Exchange (March 30, 2019). Rehan, M., Alvi, J., & Khatri, S. (2019). The Role of Capital Structure on Firm’s Profitability of Listed Cement Sector in Pakistan Stock Exchange. Saudi Journal of Economics and Finance, 3(3), 107-116., Available at SSRN: https://ssrn.com/abstract=3608192 or http://dx.doi.org/10.2139/ssrn.3608192

Muhammad Rehan (Contact Author)

Gaziosmanpasa University - Faculty of Economics and Administrative Sciences ( email )

Tokat
Turkey

Jahanzaib Alvi

​Mohammad Ali Jinnah University ( email )

22-E Block-6 P.E.C.H.S.
Karachi, Sindh 75400
Pakistan

IQRA University ( email )

Defence View
Shaheed-e-Millat Road (Ext.)
Karachi, Sindh 75500
Pakistan

Saad Khatri

​Mohammad Ali Jinnah University ( email )

22-E Block-6 P.E.C.H.S.
Karachi, Sindh 75400
Pakistan

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