Impact of financial leverage and working capital management on firm’s profitability with pandemic influences

Abstract

The current study examined the impact of financial leverage and working capital management on the profitability of thirty five firms from chemical and pharmaceutical sectors listed on the Pakistan Stock Exchange (PSX). We employed panel OLS, random effect and fixed effect regressions on the collected data of five years ranging from 2017 to 2021. Results proved that financial leverage and working capital management influenced profitability for overall, pre-covid and post-covid samples significantly. Further, the consistency of results was detected with battery of variations. This research can be of great importance for academic as well as managerial uses.