Impact of Debt Structure on Profitability in Textile Industry of Pakistan

Wali ur Rehman, Goher Fatima, Dr. Mehboob Ahmad, Impact Of Debt Structure On Profitability In Textile Industry Of Pakistan. Int. J. Eco. Res., 2012, v3i2, 61-70

10 Pages Posted: 13 Feb 2017

See all articles by Wali Rehman

Wali Rehman

COMSATS Institute of Information Technology, Islamabad; Bahria University

Goher Fatima

Bahria University

Mehboob Ahmad

FUIEMS Foundation University

Date Written: 2012

Abstract

This study aims to analyze the impact of capital structure (i.e. short-term, long-term and total debts) on the profitability of companies in textile industry of Pakistan, while controlling the size of the company. A total of 17 companies (initially 7 and then another 10) were selected randomly for the study. Regression analysis was conducted on six different regression models. The results show that there is a significant and positive impact of short term debts on the profitability of the firm, however long-term debt has no impact on the profitability. It is shown that short-term debts are useful for companies having small sales and vise versa. This study has potential for replication in other industries like cement, petroleum and pharmaceutical.

Suggested Citation

Rehman, Wali and Fatima, Goher and Ahmad, Mehboob, Impact of Debt Structure on Profitability in Textile Industry of Pakistan (2012). Wali ur Rehman, Goher Fatima, Dr. Mehboob Ahmad, Impact Of Debt Structure On Profitability In Textile Industry Of Pakistan. Int. J. Eco. Res., 2012, v3i2, 61-70, Available at SSRN: https://ssrn.com/abstract=2915964

Wali Rehman (Contact Author)

COMSATS Institute of Information Technology, Islamabad ( email )

Park Road
Chak Shahzad
Islamabad, North-West Frontier Province 44000
Pakistan

HOME PAGE: http://www.ciit.edu.pk

Bahria University ( email )

44000 Islamabad
Pakistan

Goher Fatima

Bahria University ( email )

44000 Islamabad
Pakistan

Mehboob Ahmad

FUIEMS Foundation University ( email )

Islamabad
Pakistan

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
498
Abstract Views
2,176
Rank
104,538
PlumX Metrics