Impact of Dividend Policy, Capital Structure, and Working Capital Management on Firm Performance: Evidence from the Textile Sector in Pakistan

Abstract

This study examines the influence of dividend policy, capital structure, and working capital management on the financial performance of textile companies in Pakistan. Utilizing secondary data from a sample of leading textile firms listed on the Pakistan Stock Exchange, the research employs multiple regression analysis to assess the relationship between these variables and firm performance, measured through return on assets (ROA) and return on equity (ROE). The findings indicate that a robust dividend policy positively correlates with improved firm performance, while capital structure and working capital management demonstrate varying effects across different firms. This research contributes to the existing literature by highlighting the significance of financial decision-making in enhancing the competitiveness and sustainability of the textile sector, offering valuable insights for investors and policymakers. The study emphasizes the need for textile companies to adopt effective financial strategies to optimize performance in a challenging economic landscape.