CAPITAL STRUCTURE AND ITS DETERMINANTS A STUDY ON OIL & GAS COMPANIES LISTED IN KSE

Abstract

The research is based on capital structure decisions in the oil and gas sector of Pakistan. The research is basically carried out in order to determine the importance of capital structure and explore their importance in a company. The research focuses on 8 companies belong to the Oil and Gas sector of Pakistan. The data is gathered from the financial statements of the company’s sin order to determine their capital structure. The research is Descriptive in nature and the data is gathered mainly from the secondary sources. For the purpose of analysis a regression model is used to define the relationship among the variables. The variables of the research are Tangibility, Profitability, Growth and Size. On the other hand, 10 scenarios are discussed which helps in determining the best option. The analysis suggests that size of a firm is directly proportional to its profitability. The findings of the research are that most of the oil and gas companies feature Debt as the best option. This is because the investment requirements for this business are too high and on the other hand the most important reason is that these companies do not want to dilute their ownership