Page No. : 99-116

Financial leverage plays a vital role in financing any business for exploring long term benefits and competing over the rivals. This study tried to consider the effectiveness of financial leverage on financial performance of selected companies which are operating in Pakistan. The aim of this study was to identify the impact of financial leverage on firm’s performance whether it is a positive or negative one. Five companies were selected from automobile and transport sector and the data which is collected is secondary in nature. 

The main sources of data collection are the financial statements of selected companies, data availability at SBP website and their resources also include different journals and term papers. Data of 04 years was taken for this purpose that is 2014 to 2017. Descriptive statistics and linear regression model were used. The result shows the inverse significant relation between financial leverage and financial performance.