INTERNAL & EXTERNAL DETERMINANT OF CAPITAL STRUCTURE: A STUDY OF NON-FINANCIAL COMPANIES LISTED AT KARACHI STOCK EXCHANGE

Abstract

The aim of this study is to investigate the elements influencing the financial performance of non-monetary area organizations in Pakistan. Different parts of the organizations and the general macroeconomics of the nation are inspected to decide the elements influencing everything. Several regression models, including collective regression, static consequence, and random effect models, are utilized to investigate the determinants of the debt ratio, short-term debt ratio, leverage proportion, and influence extent. It is found that the proper impact model is the best in making sense of the debt proportion and short-term debt ratio. The result of the review shows that elements like the return on assets, size, and liquidity have an opposite relationship with the debt ratio, while substantial quality, unfamiliar direct speculation, and money supply have a positive relationship with the debt ratio. Because of the short-run debt ratio, liquidity, substantial-quality tangibility, and money supply have a positive relationship. Other organization explicit and macroeconomic factors were viewed as unimportant in deciding the debt ratio and short-run debt ratio. Moreover, the investigation discovers that on account of the leverage ratio, all organization's explicit and macroeconomic factors are inconsequential. The result of this study might give helpful bits of knowledge to policymakers and professionals in the non-monetary area of Pakistan.