TY - JOUR
T1 - Capital Structure as Driving Force of Financial Performance
T2 - Case of Energy and Fuel Sector of Pakistan
AU - Liaqat, Idrees
AU - Saddique, Shamila
AU - Bagh, Tanveer
AU - Atif Khan, Muhammad
AU - Naseer, Mirza Muhammad
AU - Khan, Muhammad Asif
PY - 2017/3/7
Y1 - 2017/3/7
N2 - Choosing the appropriate mix of various short and long term sources of funds, stands among the acute decisions to be taken by management of the firms, to form elementary suitability for investment and other decisions. Literature lacking consensus pertinent to impact of capital structure on financial performance of the firms. This study intends to investigate the impact of capital structure on financial performance of fuel and energy sector of Pakistan taking into account secondary data from 2006-14. Empirical results of renowned econometric model multiple regression revealed that there is a significant negative impact of capital structure on ROA and ROE of firms in fuel & energy sector of Pakistan, while EPS is least driven by capital structure parameters, only the size has significant positive bearing on EPS. The research findings suggest provide policy makers and administrators to rely on equity financing rather debt ethos in order to mitigate the default risk exposure.
AB - Choosing the appropriate mix of various short and long term sources of funds, stands among the acute decisions to be taken by management of the firms, to form elementary suitability for investment and other decisions. Literature lacking consensus pertinent to impact of capital structure on financial performance of the firms. This study intends to investigate the impact of capital structure on financial performance of fuel and energy sector of Pakistan taking into account secondary data from 2006-14. Empirical results of renowned econometric model multiple regression revealed that there is a significant negative impact of capital structure on ROA and ROE of firms in fuel & energy sector of Pakistan, while EPS is least driven by capital structure parameters, only the size has significant positive bearing on EPS. The research findings suggest provide policy makers and administrators to rely on equity financing rather debt ethos in order to mitigate the default risk exposure.
UR - http://dx.doi.org/10.5296/ijafr.v7i1.7722
U2 - 10.5296/ijafr.v7i1.7722
DO - 10.5296/ijafr.v7i1.7722
M3 - Article
SN - 2162-3082
VL - 7
SP - 86
EP - 101
JO - International Journal of Accounting and Financial Reporting
JF - International Journal of Accounting and Financial Reporting
IS - 1
ER -