Impact of Debt Management on Performance of the Firm: Study of Oil & Gas Sector in Pakistan

Abstract

This experimental study makes an attempt in finding the connection of debt management and the performance of Firms in Pakistan. Debt management mechanisms is discussed in this research are Degree of Financial Leverage (DFL), Debt I Asset Ratio (DER), and Debt /Equity Ratio (DAR) are independent variables. On the other hand, for measuring the Performance of the firm as dependent variables Return on Equity (ROE) and Return on Asset (ROA) has been used. In this study regression analysis technique is being used on 7 listed Oil and Gas Marketing companies of Stock Exchange of Pakistan (PSX) trading during the period 2012 to 2020, results have been derived. For all the variables data has been gathered through the Annual General Reports of the companies. The finding of this study shows that the element of debt managemen1_5ch as Debt/ Asset ratio (DAR) and Debt/Equity Ratio (DER) are inversely proportional on Performance of firms as measured by Return on Assets (ROA) and Return on Equity (ROE). While the degree of financial leverage has no effect on the firm's success,.