Impact of Capital Structure on Profitability of Oil and Gas Sector

Abstract

In Pakistan’s economy, the role of the oil and gas sectoris very dynamic in the progression of the organization’s growth. This research study is based on the impact of capital structure on profitability of oil and gas sector. This capital structure includes the organizations long-term and short-term debt, common equity, earning per shares and many other related technique which are used to determine the organization performance. In this research study, the researcher emphasize is on Modigliani and Miller's capital structure irrelevance proposition theory and model. The main functionality of M and M capital structure model and theory is effectively utilized by Weight average cost of capital (WACC) always remain constant and helpful for changing company capital structure.Type of research study is qualitative in nature. The outcome of this study is based on capital structure model that performing its firm operational functional activities associated with debt evaluated in term of oil and gas sector. This equity is evaluated in term of Shortterm debt such as working capital requirements is also considered to be part of the capital structure.