The concerned study is quantitative in nature and depicts the research question that Does financial distress has any impact on Accounting Returns (ROA) and Leverage? Our book has total nine variables in which there are two dependent variables of Accounting Returns (ROA) and Leverage. Financial Distress is independent variable. TheFirm size, Tangibility, Profitability, Debt ratio, Market to Book ratio, and corporate tax rate before financing are control variables. Financial distress is measured by the model introduced by Achim (2012) as he had divided different financial statement ratios into four principal components. The profitability is further operationalized in to return on assets, return on equity and return on sales. This topic for research was selected just because numerous models for the prediction of financial distress have been introduced and a lot of work has been done on the prediction of financial distress of the firms but still the impact of financial distress on other variables like Accounting Returns (ROA) and Leverage etc has not been examined.

Sundas Khalid; Msc (Accounting & Finance)M.phill (Finance); Bahauddin Zakaria University Multan Pakistan.