The Effect of Capital Structure on Firms Performance

Abstract

The central theme of  the  study  was  to  examine  the  effect  of  capital  structure  on  the  firm  financial performance of non-financial companies in Pakistan. Data was collected from the annual reports of non-financial companies listed on Pakistan Stock Exchange (PSX) for the period 2010 to 2015. Return on Assets (ROA) and Return on equity (ROE) were used to measure the firm’s financial performance whereas Debt to Equity ratios were used to measure Capital Structure.

For analyzing data the panel regression analysis method had been used as a statistical technique. The results showed no connection between capital structure and firm’s financial performance.