Relationship between Financial Leverage and Financial Performance: Empirical Evidence of Listed Sugar Companies of Pakistan
Sugar Industry is the 2nd 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.
