The Optimal capital structure has a great importance to every manager and board of directors of the company. The financial leverage is also a puzzle for the management, when it comes to form the best leverage that is most suitable for the firm's needs. Failure to put considerations on capital structure might lead to less profitability, loss, bankruptcy and decrease in the value of the firm's value. This study set out to investigate the impact of financial leverage on firm performance of the listed oil refineries in Pakistan. It took performance measures in a wider perspective by using ROE. In addition to financial leverage the study expanded its explanatory variables by controlling for liquidity and firm age. The data was collected from the financial statements of listed oil refineries in Pakistan. The study employed pooled regression analysis, from the secondary data taken from the financial statement of the listed oil refineries in Pakistan, from 2012 to 2016. It was founded that firm performance, measured by the proxy of return on equity had a significant negative relationship with financial leverage. On the other hand the control variables, firm age and liquidity had insignificant relationship with variable return on equity
Return on equity, financial leverage, liquidity and firm age
