Journal of Research in International Business and Management

The Effect of Dividend Policy on Financial Performance: A Case Study of Engro and Fauji Fertilizer Companies in Sindh Pakistan

Abstract

Muhammad Yaseen Burdi*, Foazia Jamal, Asif Jamal, Akram Ali Lashari

This study examines the effect of dividend policy on the financial performance of Engro and Fauji fertilizer companies from 2014 to 2017. The research employs a descriptive methodology and utilizes secondary data from financial statements to assess key performance indicators, including Dividend Payout Ratio (DPR), Dividend per Share (DPS), Return on Assets (ROA), leverage, and company size. The findings reveal a significant positive correlation between DPS and firm performance, i ndicating that higher dividend payments are associated with improved financial results. In contrast, DPR and leverage exhibit weak positive associations with financial performance, while firm size negatively impacts ROA. These insights suggest that a robus t dividend policy is crucial for enhancing the financial performance of fertilizer companies, underscoring the importance of strategic financial management. Future research could explore the impact of dividend policy across different sectors and geographic al contexts contexts.

Share this article