Relationship between Financial Leverage and Financial Performance: Empirical Evidence of Listed Sugar Companies of Pakistan

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Syed Shah Fasih Ur Rehman
Syed Shah Fasih Ur Rehman
1 University of Gujrat, Gujrat Pakistan

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GJMBR Volume 13 Issue C8

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Sugar Industry is the 2 nd most main industry of Pakistan after cotton. Pakistan is rich in the production of sugar, most of the production of sugar is consumed by the locals and surplus is exported. It is general concept that financial leverage and financial performance has positive relationship. The objective of the current study is to investigate the influence of financial leverage on financial and to investigate whether financial leverage has an effect on financial performance by taking evidence from listed sugar companies of Pakistan. The results of the study show the mix results. The results show the positive relationship of debt equity ratio with return on asset and sales growth, and negative relationship of debt equity ratio with earning per share, net profit margin and return on equity.

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No external funding was declared for this work.

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The authors declare no conflict of interest.

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Syed Shah Fasih Ur Rehman. 2013. \u201cRelationship between Financial Leverage and Financial Performance: Empirical Evidence of Listed Sugar Companies of Pakistan\u201d. Global Journal of Management and Business Research - C: Finance GJMBR-C Volume 13 (GJMBR Volume 13 Issue C8): .

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GJMBR Volume 13 Issue C8
Pg. 33- 40
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Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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August 30, 2013

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English

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Sugar Industry is the 2 nd most main industry of Pakistan after cotton. Pakistan is rich in the production of sugar, most of the production of sugar is consumed by the locals and surplus is exported. It is general concept that financial leverage and financial performance has positive relationship. The objective of the current study is to investigate the influence of financial leverage on financial and to investigate whether financial leverage has an effect on financial performance by taking evidence from listed sugar companies of Pakistan. The results of the study show the mix results. The results show the positive relationship of debt equity ratio with return on asset and sales growth, and negative relationship of debt equity ratio with earning per share, net profit margin and return on equity.

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Relationship between Financial Leverage and Financial Performance: Empirical Evidence of Listed Sugar Companies of Pakistan

Syed Shah Fasih Ur Rehman
Syed Shah Fasih Ur Rehman University of Gujrat, Gujrat Pakistan

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