The study examines the macroeconomic variables impact on financial performance, using the financial statement of listed companies in Automobile sector of Pakistan stock exchange. The study covered the period from 2007 to 2016. Before applying the GMM model the preliminary test was done. Firm performance is measured with three ratios i.e., return on assets (ROA), return on equity (ROE) and gross profit margin ratio (GPM). The results revealed that the selected macroeconomics variables have the negative relationship with return on equity, return on assets and gross profit margin and the inflation has positive relation with return on equity and negative relation with return on assets (ROA) and gross profit margin (GPM).

The main aim of this research is to analyze the association between cashholding and firm performance with moderating role of corporate governance. For the purpose of analysis, secondary data of 145 non-financial firms listed at Pakistan Stock Exchange (PSX) is taken from 2006-2017. The dynamic Generalized Method of Moments (GMM) is applied to cater the problem of unobserved heterogeneity. The results of this study suggest that cash holding has a significant impact on firm performance. Moreover, corporate governance significantly moderates the relationship between cash holding and firm performance.