Abstract:
Purpose: The purpose ofthis research is to identify the determinants ofcapital structure ofoil
sector in Pakistan.
Methodology: The research design used in this study is explanatory study and the data is
collected from secondary sources like research papers, books, journals, articles, and
periodicals. The data is collected for five years and in total 8 oil companies of Pakistan
taken into consideration. The purposive sampling technique is used in this study. In this study,
Return on Assets (ROA), tangibility ofassets (Tang), firm size (size), growth, and inflation are
independent variables and debt to equity (DE) ratio as dependent variable.
are
Findings: The results show that ROA and size have statistically significant impact on DE,
while tang, growth, and inflation have insignificant impact on DE.
Limitations: This study uses secondary data sources, which might not accurately reflect the
study's needs, is one of its weaknesses. The fact that this analysis was restricted to only four
variables including leverage, firm size, profitability, and tangibility, inflation, and growth is
another limitation. It should be emphasized that numerous factors other than those covered in
this study that are related to profitability have an impact on profitability.
Conclusion: These results will be important for policy makers and top management of oil
companies ofPakistan to consider the results ofthis study and devise the policies and strategies
accordingly.
