Purpose: The purpose of this paper is to find out the impact of financial leverage on firm’s profitability in the listed textile sector of Bangladesh. Research design, data and methodology: A sample of 22 DSE listed textile firms has been used to conduct the study. In this study, firm profitability is measured by Return on Equity (ROE) and both short term debt and long term debt are used as the as proxies of financial leverage. Pooled Ordinary Least Squares (OLS), Fixed Effect (FE), and Generalized Method of Moments (GMM) models have been used to test the relationship between financial leverage and profitability of firms. Result: This study finds a significant negative relationship between leverage and firm’s profitability using the Pooled OLS method. The result is also consistent with the fixed effect and GMM method. This result implies that firm’s profitability is negatively affected by the firm’s capital structure. Conclusion: The study concludes that maximum textile firms use external debt as a source of finance as they don’t have sufficient internally generated funds. This study recommends that firm should give more emphasize on generating fund internally to meet up their financing needs.

Abstract
1. Introduction
2. Literature Review & HypothesesDevelopment
3. Research Methodology
    3.1. Sample selection & Data Collection
    3.2. Research Models
    3.3. Definition of Variables
4. Empirical Results
    4.1. Descriptive Analysis
    4.2. Correlation Matrix
    4.3. Multivariate Analysis
    4.4. Additional Analysis
5. Conclusions
References

• Md. Musfiqur RAHMAN(Dept. of Accounting and Information Systems, Faculty of Business Studies, University of Dhaka) Corresponding Author
• Farjana Nur SAIMA(FBSS (BMA), BUP Bhatiary, Chattogram, Bangladesh, Bangladesh)
• Kawsar JAHAN(Dept. of Accounting and Information Systems, University of Dhaka, Dhaka)