ANALYZING STRUCTURAL AND MARKET INFLUENCES ON PROFITABILITY IN LISTED COMPANIES OF PAKISTAN

This paper investigates the extent and direction of influence that several variables, liquidity, financial leverage, sales growth, company size, average tax rates, and specifically credit rating, have on the profitability of companies that are listed on the Pakistan Stock Exchange in 2023. In the research, multiple regression analysis is used to establish the extent to which the above factors affect profitability, especially with reference to credit ratings. The study shows that credit ratings and financial leverage have solid and positive relationships with profitability. However, the effects of other market forces are still challenging to determine, and new industry growth rates are not as consistent as may seem. The regression analysis shows that the above independent variables explain a 36.3% variation in Return on Asset (ROA) and a 32.7% variation in Return on Equity (ROE) with a 5% significant level. Although other related studies have considered the course, this study is different in that credit ratings are examined in relation to profitability. The findings endorse conceptual literature conclusions on credit rating and profitability as evidenced in the previous literature. This research is useful to investors, creditors, and firm management who need to assess possible profitability by employing certain financial ratios, especially credit scores. More empirical studies could expand this thinking to unquoted businesses and SMEs in diverse industries.