Abstract

This study motives to analyze and understand the association between capital structure and profitability and the fastidious to measure their significance in manufacturing and non manufacturing industries of Pakistan. The paper adopts a quantitative data of different manufacturing and non manufacturing organizations in Pakistan. The financial statements were analyzed of manufacturing and non manufacturing organizations of Pakistan for the period of 2008-2013. The study reveals the fact, profitability and debt in manufacturing and non manufacturing industry is an insignificant relationship and a strong positive link between profitability and debt. The population of the study is a Manufacturing and Non-Manufacturing industry of Pakistan and units of analysis is D.G Cement factory and AGTL from Manufacturing industry and, HBL & Bank Al-Falah from Non-Manufacturing industry. In this paper descriptive statistics were used to interpret the data. It is proved that manufacturing industry has found a strong negative regression between debts and profit and the non-manufacturing has found a strong positive regression between debt and profit.

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