Influence of Capital Structure on Financial Performance

Financing decision is one of the important areas in financial management to increase shareholders’ wealth. Firms can use either debt or equity capital to finance their assets. The purpose of the study is to find out the determinants of capital structure and its impact on financial performance. We have used secondary data and taken 50 top manufacturing companies for our study. Regression model has been used to study the relationship and impact of capital structure on profitability. The study concludes that there is a significant relationship between capital structure and profitability and capital structure has significant impact on financial performance of sample companies.