No.

1.

Author
Mujahid, M. and Akhtar, K (2014).
Impact of Capital Structure on
Financial Performance and
Shareholder Wealth.
Javed, T, Younas, W. and Imran, M
(2014). Impact of Capital Structure on
Firms Performance.

Variables
1.EPS
2.ROA
3.ROE

Findings
Our results shows that the capital structure
positively impact the Firms Financial Performance
and Shareholders Wealth

Sector/ Country
Pakistan
Textile Industry

1.ROE
2.ROA
3.ROS

Pakistan
Non-Financial
Firms.

3.

Bokhari, H. W. and Khan, A. M. (2013).

The Impact of Capital Structure On
Firms Performance

1.ROA
2.ROE
3.Net Profit Margin
4.EPS

4.

Memon, F. Bhutto, N. A and Abbas, G.

(2012) .Capital Structure and Firm
Performance

1.ROA
2.Size
3.Tangibility
4.Growth

5.

Mumtaz, R. Rauf, S. A. Ahmed, B. and

Noreen, U. (2013). Capital Structure
and Firm Performance

6.

Shah, B. (2014). Impact of Capital

Structure on Firm Performance.

1.EPS
2.ROA
3.ROE
4.Price/Earnings
Ratio
5.Operating Profit
Margin
1.Gross Profit
Margin
2.Net Profit Margin
3.ROA
4.ROE

The finding of this research is that capital

structure has impact over firm performance so
managers should adopt necessary carefulness
while taking decisions regarding capital structure.
All the capital structure variables negatively
affected Earning per Share (EPS) and were
significant. Assets Turnover affected the
performance positively for all proxies except Net
Profit Margin (NPM) for which it was positive but
insignificant. Size of the firm positively affected
the performance overall while Sales Growth
(SALG) has a significantly negative impact on
Return on Assets. Assets Growth was found to
have on impact on the performance of the firms.
The results indicate the all the determinants of
capital structure are significant and the findings
suggest that Pakistan textile sector is performing
below the optimum capital structure level and
textile firms of large size remained fail to achieve
the economies of scale. So, it is a matter of
serious concerns for policy makers and financial
managers and this problem should be dealt
positively to improve the financial performance of
firms.
Findings of this study suggest that financial
performance of firms is significantly affected by
their capital structure and their relationship is
negative in nature. Moreover capital structure of a
firm is negatively related to its market value and
also increases its risk level as the share of debt
increases in the capital mix.
Results reveal a strong negative relationship
between debt to asset and firm performance
variables (GPM, NPM, ROA, and ROE). Further,
there is a positive relationship between debt to
equity and firm performance variables (GPM and
NPM), and a negative relationship between debt
to equity and firm performance variables (ROA
and ROE). Moreover, capital structure variables
significantly impact firm performance

2.

Pakistan
Non-Financial
Firms.

Pakistan
Textile Industry

Pakistan
Different Sectors.

Pakistan
Different Sectors

7.

Umar, M. Tanveer, Z. Aslam, S. and

Sajid, M. (2012). Impact of Capital
Structure on Firm's Financial
Performance.

1.EBIT
2.ROE
3.ROA
4.P/E
5.Net Profit Margin

8.

Amara. and Aziz, B. (2014). Impact of

Capital Structure on Firms
Performance.

1.ROA
2.ROE
3.EPS

The results show that all the three variables of

capital structure, Current Liabilities to Total Asset,
Long Term Liabilities to Total Asset, Total
Liabilities to Total Assets, negatively impacts the
Earning before Interest and Taxes, Return on
Assets, Earning per Share and Net Profit Margin
whereas Price Earnings ratio shows negative
relationship with Current Liabilities to Total Asset
and positive relationship is found with Long Term
Liabilities to Total Asset where the relationship is
insignificant with , Total Liabilities to Total Assets.
The results also indicate that Return on Equity
has an insignificant impact on Current Liabilities to
Total Asset and Total Liabilities to Total Assets but
a positive relationship exists with Long Term
Liabilities to Total Asset. These results, in general,
lead to the conclusion that capital structure choice
is an important determinant of financial
performance of firms.
Results of regression analysis revealed negative
relation of capital structure ratios with
performance while among these, only debt to
equity ratio has significant effect on companys
performance. Negative relation of capital structure
ratios lead to the conclusion that food sector is not
properly utilizing debt in its capital structure and
financial analysis need to find an optimal mix of
debt and equity for maximization of companys
profits.

Pakistan
Top 100
Companies in
Karachi Stock
Exchange.

Pakistan
Food Industry