Exploring Capital Structure Effect on Leverage in Non-Financial Companies Listed in PSX

Abstract

Capital structure is considered as relationship between different financial resources of the firms. Previous research led on capital structure determinants influencing obligation level of non-financial companies shows various outcomes with absence of study on finding suitable factors (hypothesis and variables) influencing capital structure of non-monetary firm in setting of creating nations as Pakistan. The data has been collected from sugar and cement industry of non-budgetary sector from Pakistan Stock Exchange of 48companies, i.e., 18 cement and 30sugar firms has been selected. The companies which had missing data from period of year 2010-2015, negative shareholder equity, larger leverage ratio, larger debt to asset ratio is excluded in order to avoid misleading results. The information is collected by studying monetary record given by State Bank of Pakistan and structure site open entryway. Results show that substantial quality of benefits is huge and emphatically related with obligation proportion which is utilized as a pointer for capital structure and productivity, while size and development are essentially and contrarily connected with influence. Further, this investigation adds new information to the current assemblage of information on substance, productivity, size, development and influence with regards to create nation as Pakistan.