Islamic Azad University,

This is an Open Access Journal / article distributed under the terms of the Creative Commons Attribution License (CC BY-NC-ND 3.0) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. All rights reserved. Financing decisions of firms, clearly the company’s capital structure has a considerable impact on its current and future performance. Available empirical evidence suggests that financing via liabilities improves potentially the profitability of the company. Since benefits of financial leverage are important in the success of the company, this article aims mainly to describe the role of financial leverage on the performance of listed companies in stock exchange. Sample under investigation consisted of 115 companies; their financial data was collected for the years 2007 to 2012 and analyzed statistically. Overall, the findings indicate that financial leverage has a significant positive relationship with the performance of sample companies. In other words, firms with higher debt levels are more profitable. Key words: capital structure of the company, financial leverage, firm performance