Abstract:
Purpose -
The primary aim of the study is to determine the potential determinants of capital structure
for the textile industry of Pakistan.Capital structure assessment is most critical and decisive
part for any firm as they effect directly to the cost and value of firm. For this, the research
will examine the different key factors that affect capital structure offirm.
Design/methodology/approach -
The thesis is “Quantitative” in nature, where the findings and discussion would be based on
scientific calculations of the selected variables. The thesis has exploited the Multiple
Regression Analysis, using the SPSS software to determine the relationship between the
dependent variable (leverage) with the independent variables (sales, tangibility of fixed
assets, firm size, profitability', taxation, financing cost and number ofshares).
Findings -
Result of the study shows that there is insignificant relation between leverage (dependent
variable) and firm size, number of shares, sales, and taxation (independent variable) of the
textile sector of Pakistan. While Leverage (dependent variable) and total assets, financial
cost and profit (independent variable) has significant relation in textile sector of Pakistan.
Practical implications -
The factors argued and outcome of the study helped to fascinate and develop base of
determinants of optimal capital structure and that may assist to textile sector companies in
Pakistan to take effective and precise decision linked to capital structure needs. Moreover,
this study and its finding may help the decision makers better adjust themselves in
implementing and considering dexterous ways of managing capital structure of textile
sector.
