| Article Details : |
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| | | Article Name : | | | Impact of Capital Structure on Financial
Performance: A case study of Pakistan Textile
Industry | | Author Name : | | | IMTIAZ NAJAM1, SAJID ALI KHAN, UAMARA SHEIKH | | Publisher : | | | Bridge Center | | Article URL : |  | | | Abstract : | | | The capital structures of a firm have a value of backbone and
essentials part. Its play a very important role to capture the market
while fabricating maximum financial performance which is best
interest of the share and stake holders for more investment as well. The
textile industry of Pakistan is the largest industry and major segment
of manufacturing sector which is very helpful to capture the exporters.
But unfortunately the performance of Pakistan textile industry is
under the optimum level which is very serious matter. In this
quantitative study, 31 registered firms at Karachi Stock Exchange
(KSE) of Pakistan were analyzed for the period of four years 2010-2013
to seek the best mixture of capital structure to enhance the firm’s
profitability. The panel data was fetched from annual financial reports
of the firms’. Wherein, return on assets, return on equity and earnings
per share considered as dependent variables. Independent variables
are short-term debt, long-term debt, debt to assets ratio, debt to equity ratio and firm size which is consider as control variable. To indentify
the cause and effects relationship between the variables, pooled and
fixed effects regression models were applied. The analysis concludes
that capital structure is significant with financial performance in case
of return on equity & earnings per share and insignificant in case of
return on assets. | | Keywords : | | | Capital Structure, Short-term Debt (STD), Long-term
Debt (LTD), Debt to Assets Ratio (DAR), Debt to Equity Ratio (DER),
Firm Size (FSV), Financial Performance, Return on Assets (ROA),
Return on Equity (ROE), Earnings per Share (EPS) and Textile
Industry of Pakistan. |
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