Impact of Capital Structure on Economic Value Added (EVA) – A Study of PSX Listed Companies
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Author:
ABU BAKAR BIN RIZWAN
Citable URI :
https://vspace.vu.edu.pk/detail.aspx?id=108
Publisher :
Virtual University of Pakistan
Date Issued:
1/15/2018 12:00:00 AM
Abstract
This thesis intends to investigate the impact of capital structure on the performance of non-financial firms of Pakistan. Non-financial firms listed on Pakistan Stock Exchange are taken as sampling frame for the study. Economic value added (EVA) is used as proxy for measuring the performance of the firms. Total debt to total assets (TDTA) and long term debt to total equity (LTDTE) are used as capital structure variables. Sales to assets ratio (SAR), sales growth rate (SGR) and firm’s size (SIZE) are used as control variables in this study. Total firms listed at PSX were 450 at the time of study. By using simple random sampling formula, sample size is calculated as 137 companies. Later, the sample size came down to 134 companies due to incomplete data. The data is taken for a period of eleven years starting from 2005-06 to 2015-16. Generalized Least Square (GLS) regression is used to analyze the data. Economic value added (EVA) was found to have significant direct relationship with long term debt to total equity (LTDTE), sales to assets ratio (SAR), sales growth rate (SGR) and firm’s size (SIZE). On the hand, the impact of total debt to total assets (TDTA) on economic value added (EVA) was found to be insignificant.
URI :
https://vspace.vu.edu.pk/details.aspx?id=108
Citation:
Bin Rizwan, A.B.(2017). Impact of Capital Structure on Economic Value Added (EVA) – A Study of PSX Listed Companies. Virtual University of Pakistan, (Lahore, Pakistan).
Version :
Final Version
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