EMPIRICAL ANALYSIS OF THE IMPACT OF CAPITAL STRUCTURE ON THE PROFITABILITY OF AUTOMOBILE INDUSTRY
Journal Title: International Journal of Management, IT and Engineering - Year 2017, Vol 7, Issue 5
Abstract
The Capital Structure of a firm describes how it has sourced its finances. This capital structure is comprised of the owned & the owed capital. There are a number of determinants that affect the decisions taken while determining this capital structure like cost of capital, control, flexibility etc. The Indian Automobile Industry is the seventh-largest auto producer in the world with an average annual production of 17.5 Million vehicles. This paper is an attempt to ascertain the impact of capital structure (CS) on the profitability (P) of the firm. This study is focused on Bajaj Auto Limited, TVS Auto Limited, Hero Motors Limited and Atul Auto Limited. All these four companies are into the manufacturing of two and three wheelers auto Products. Liquidity and growth in terms of performance of the firm have significant influence on debt-equity ratio. In other words, sustainable growth along with credit worthiness of the firm influences debt-equity ratio i.e., degree of financial leverage. Capital structure, the mix of long term debts and equity securities, is generally used to finance long term assets of companies. It consists of permanent short-term debt, preferred stock, and common equity. The results revealed there is positive relationship between capital structure and financial performance.
Authors and Affiliations
Dr. Atul A. Agwa
Keywords
Related Articles
- EP ID EP18703
- DOI -
- Views 286
- Downloads 13
An Algorithm for Land Surface Temperature Analysis of Remote Sensing Image Coverage over Dehradun District, Uttarakhand, India
Estimation of LST from remotely sensed data is nowadays usual. LST is a key parameter in the physics of land surface processes because it is involved in the energy balance as well as in the evapotranspiration and deser...
slugE-Commerce online payment security issues discussion and analysis
Nowadays electronic commerce services have risen to become more ... The handling of the payment may involve many ways, such as online banking. Computer network technology is developing fairly rapidly. With the Internet...
Entrepreneurship in the Emirates
The global community is experiencing a wave of entrepreneurship today. It has swept into many countries and societies. Today, employees in all sectors of the economy are being asked to become self-starting, as well as...
slugRole of ICT for Record Management in the Wake of RTI Act
Right to Information (RTI) for accessing official information is one of the powerful tools bestowed to every citizen of India. It is a unique example in the developing world especially in the country with a population...
Impact of Demonetization on Banking Services “Among All forms of mistAke, prophecy is the most grAtuitous.” George Eliot, Middlemarch
Demonetization is the process of stripping a currency unit of its status as legal tender. The opposite of remonetisation in which a form of payment is restored as legal tender. Due to demonetization it affects the peop...