Effect of financial leverage on the firm profitability in Textile sector of Pakistan

ABSTRACT: This research is conducted to check the impact of financial leverage on firm profitability of firms listed at Karachi stock exchange which belongs to the textile sector of Pakistan. Data ranges from the period 2009 to 2014. Textile sector is one biggest sector of Pakistan but 10 firms selected for analysis. Other firms are neglected because their data was not available. Secondary data was used and data collected from the annual reports of firm. Data was analyzed using regression technique. This statistical technique was applied to find out the association between the dependent variable with respect to independent variable. Financial leverage in the capital structure of a firm is an independent variable whereas firm’s profitability is dependent variable. Based on regression analysis, results indicate that financial leverage and firm profitability has no significant relationship.


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