THE NEXUS OF CASH FLOW, CAPITAL EXPENDITURES AND FINANCIAL LEVERAGE WITH PHARMACEUTICAL FIRM’S PERFORMANCE IN PAKISTAN

Abstract

The study seeks to investigate the relationship of cash flow, capital expenditures and financial levrage with performance of Pharmaceutical firms in Pakistan over the period 2009-2018. Random effect model is applied for empirical testing the relationship in a static model. The results disclose a significant nexus of cash flow, capital expenditures and financial leverage with the performance of Pharmaceutical firms. Keeping in view the hypothesis of study, the cash flow, capital expenditures and financial leverage are more likely results in higher performance of pharmaceutical firms. The study has significant implications for corporate managers, policy makers and investors. Previous studies have mostly used stock return volatility to measure the performance of firm. This study has focused on the other three variables to measure the performance of firms.