This study can be conducted to examine the nexus between sales growth and profitability, with debt capacity serving as a mediating variable. In this framework, sales growth is treated as the independent variable, profitability as the dependent variable, and debt capacity as the mediator. The research applies a sample of 230 listed Pakistani non-financial companies on the Pakistan Stock Exchange (PSX) over the period 2017–2022. Using this dataset, the analysis explores how sales growth influences profitability, while also considering the role of debt capacity in shaping this relationship. The findings indicate that sales growth has a significant positive effect on profitability, demonstrating that firms with higher sales growth tend to achieve improved financial outcomes. However, profitability is found to be adversely affected by debt capacity, suggesting that higher reliance on debt can reduce overall profitability. Interestingly, debt capacity itself exhibits a positive effect on sales growth, highlighting its role in enabling firms to finance expansion strategies. These results provide insights into corporate financing and growth strategies within the Pakistani context.
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