Impact of Financial Leverage on Firm’s Performance – A Case of Cement Production Industries of Pakistan.

Author(s)

Saiqa Yousaf ,

Download Full PDF Pages: 98-105 | Views: 309 | Downloads: 101 | DOI: 10.5281/zenodo.3468742

Volume 6 - January 2017 (01)

Abstract

This study is an attempt to set up a stochastic relationship between financial leverage and firm’s performance of cement industry operating in Pakistan. For this study 23cement producing firms working out of these 18 are consolidated in the review and six years yearly information from2010 to 2015 with respect to financial leverage influence on firm’s performance for said sector were contemplated. The specimen measure for eighteen firms for a long time comprises of 106 perceptions. A Conventional Slightest Square model is connected on the information to build up a causal relationship between the factors. The review finds that financial leverage influence has a factually huge opposite effect on firm’s performance at 99% certainty interim.

Keywords

Financial Leverage, Firms’ profitability, Cement Sector

References

  1. Abbas. (2012). Relationship between Cost of Capital &Accounting Criteria of Corporate Performance Evaluation: Evidence from Tehran Stock Exchange. . World Applied Sciences Journal , 20(5). pp. 666-673.
  2. Akhter, P. H. (2012). The Determinants of Capital Structure: A Case from Pakistan Textile Sector (Spinning Units). In Proceedings of 2nd International Conference on Business Management.
  3. Amsaveni. (2009). Impact of leverage on profitability of primary aluminum industry in India. Indian Finance Journal, , 20, 35-55.
  4. Baker, S. (1973). Risk Leverage and Profitiabilty: An Industry Analysis. Review of Economics and Statistics, 55(4); 503-507.
  5. Banafa, A. M. (2015). The impact of leverage on Financial performance of listed non financial firm in Kenya . Internation Journal of Finance and Accounting , 4(7), 1-20.
  6. Ceasar, G. &. (2003). “Capital Structure and Financing of SMEs: Australian Evidence. ” Journal of Accounting and Finance , 43, 123-147.
  7. Cheong, E. Y. (2005). The effect of financial leverage on profitability and risk of restaurant firms. The Journal of Hospitality Financial Manegments, 13, 200-210.
  8. Emamgholipour. (2012). Relationship between Cost of Capital &Accounting Criteria of Corporate Performance Evaluation: Evidence from Tehran Stock Exchange. World Applied Sciences Journal, 20(5). pp. 666-673. Exchange, K. S. (n.d.).
  9. Ferati, R. ,. (2012). Capital structure and Profitability: The Macedonian Case . European Scientific Journal, 8 (7).
  10. Fu. (1997). Relationship between Capital Structure & Profitability: A time-Series Cross-Sectional Study on Malaysian Firms. (PhD dissertation, Universiti Utara Malaysia).
  11. Graham, J. R. (2000). How big are the tax benifits of Debts. the Journal of Finance , Vol No 5.
  12. Hall. (2004). “Determinants of the Capital Structures of European SMEs”. Journal of Business Finance & Accounting, Vol. 31, No. 5 & 6, pp. 711- 728 52. Jhang. (2005). Jnag. (2005).
  13. Kester, W. (1986). Capital and Ownership Structure: A Comparison of United States and Japanese Manufacturing Corporations”. Financial Management,, pp. 5–16.
  14. Khan, A. (2012). The relationship of capital structure decisions with firm performance: A study of the engineering sector in Pakistan . Internation Journal od Accounting and Financial Reporting , 2(1). 245.
  15. Larry. (1995).
  16. Maina L.K. (2013). Capital Structure and Financial Performance in Kenya: Evidence from Firms listed at the Nairobi s . Jono Kenyatta University of Sceince and Techonology Research Conference. Kenya. Nairobi.
  17. Majd, P. (2012). Relationship between Cost of Capital &Accounting Criteria of Corporate Performance Evaluation: Evidence from Tehran Stock Exchangel . World Applied Sciences Journal, 20(5). pp. 666-673.
  18. Majumdar. (1997).
  19. Mandelker. (1984).
  20. Mansourimina. (2012). Relationship between Cost of Capital &Accounting Criteria of Corporate Performance Evaluation: Evidence from Tehran Stock Exchange. World Applied Sciences Journal , 20(5). pp. 666-673. Mec
  21. kling, J. a. (1976).
  22. Mesquita, J. .. (2003). Capital structure &profitability: the Brazilian case. In Academy of Business & Administration Sciences Conference, (pp. pp. 11-13.). Miller. (1977). Myers. (1948).
  23. N.A.Y, T. .. (2012). Relationship between Cost of Capital &Accounting Criteria of Corporate Performance Evaluation: Evidence from Tehran Stock Exchange. World Applied Sciences Journa, 20(5). pp. 666-673.
  24. P.Govindasamy, C. M. (2010). Leverage: an analysis and its impact on profitability with reference to selected cement companies in India. Journal of Economics, Finance and Administrative Science, ., 27, 50-75.
  25. Pratheepkanth. (2011). Capital Structure &Financial Performance: Evidence from Selected Business Companies in Colombo Stock Exchange Sri Lanka. Journal of Arts, Science & Commerce, 2(2).pp. 171- 181.
  26. Pratheepkanth.Puwanenthiren. (2011). Capital Structure and Financial Performance: Evidence from Selected Business Companies in Colombo Stock Exchange Sri Lanka. Journal of Arts, Science & Commerce., (2): 1- 13.
  27. Rajan. (1995). what do we about Capital structure. Journal of Finance, 50, 1421-1460.
  28. Rajjan, Z. (1995).
  29. Ramezani. (2012). Relationship between Cost of Capital &Accounting Criteria of Corporate Performance Evaluation: Evidence from Tehran Stock Exchange. . World Applied Sciences Journal 20(5), pp. 666-673.
  30. Sheel. (1944).
  31. Sheel, A. (1994). Derterminants of Capital Structure choice and emperical on leverage behaviour: A comparative analysis of hotel manfacturing firms . Hospitality Research Journal, 17, 3-16.
  32. Stulz, L. L. (1995). Leverage investment and firm growth. Journal of Financial Economics, 40, 3-29.
  33. Timan, S. a. (1988). The Determinants of Capital Structure Choice . Journal of Finance .
  34. Titman. (1998). Trade of Theory. (n.d.).
  35. Wald, J. (1999). How firm characteristics affect capital structure. Internation comparison Journal of Finance Research , 22,161-188.

Cite this Article: