Investigating the Impact of Capital Expenditures on Firms’ Profitability of Textile Sector of Pakistan

Abstract

The research objective was to determine the impact of capital expenditure on textile firm’s profitability in Pakistan. For this purpose, study utilizes panel data from the annual reports of firms operating in the textile sector of Pakistan. Quantitative research approach and longitudinal research design was applied. The panel data results indicates that the impact of capital expenditures on firm profitability is significant and positive. The findings suggest that increasing capital expenditures can lead to higher profitability for textile firms in Pakistan. This implies that textile firms in Pakistan should prioritize investments in capital expenditures in order to improve their financial performance. The findings provided by this research could be valuable for textile firms in Pakistan as they seek to make strategic investment decisions. Additionally, policymakers and investors in the textile sector can use the results of this study to inform their decision-making processes and optimize investment strategies. The study's findings could also contribute to a better understanding of the relationship between capital expenditures and firm profitability in the textile sector of Pakistan. The research could also helped to the researchers to conduct their research in future.