IMPACT OF CAPITAL EXPENDITURE ON FIRM’S PERFORMANCE IN AUTOMOBILE SECTOR OF PAKISTAN: MODERATING ROLE OF CASH FLOWS

Abstract

The purpose of the study was to find out how capital expenditures (CAPEX) influenced Pakistani automobile industries' performance. In this study, we used panel data analysis of companies that are listed in Pakistan stock exchange. The sample for this study panel dataset of automobile firms in Pakistan over a specific period. Secondary used for collecting financial data, such as capital expenditure, company’s performance indicator (return on assets), and cash flow variables. Multiple regression analysis is employed to analyze the relationship between capital expenditure and firm performance considering the moderating effect of cash flows. Based on this research, Pakistani automobile companies may become more profitable by raising their capital expenditures and appropriate cash flows. The study also examines how cash flows, a moderator that can either strengthen or diminish the link between CAPEX and performance of the firms, play a part. The study's findings could contribute to clarifying how capital expenditures and company performance relate to one another in Pakistan's textile industry. The study may have aided future research projects for the researchers.