CAPITAL STRUCTURE, LIQUIDITY AND FINANCIAL PERFORMANCE OF THE FIRMS IN CEMENT AND SUGAR INDUSTRIES OF PAKISTAN

Alam Rehman, Zunaira Raza, Haseeb Ur Rehman, Shams Ur Rehman, Muhammad Farooq

Abstract


This research examines the impact of firm capital structure and liquidity on the financial performance of sugar and cement sector firms in Pakistan. The study used the secondary data of 30 firms randomly selected for the period 2005 to 2017. The data was analyzed through statistical tools like correlation and regression. The results revealed that the capital structure proxies have a negative correlation with financial performance proxies of these sector firms.
The results indicated that debts to equity ratio and the fund capital ratio has a negative insignificant impact however the debts ratio and Funded debts ratio were found having a negative significant impact on the financial proxies of these selected firms. The results indicated a positive correlation of the liquidity with the financial performance of these firms. The results demonstrating positive effect of current and quick ratios on the financial performance proxies of these firms. The study has some meaningful insights for the financial managers and decision makers of these firms.


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ISSN 2521 – 5515