A STUDY ON THE RELATIONSHIP BETWEEN CAPITAL STRUCTURE AND PROFITABILITY-A STUDY OF SELECT CEMENT COMPANIES

Capital Structure Decision is the vital one since the profitability of an enterprise is directly affected by such decision. The successful selection and use of capital is one of the key elements of the firm’s financial strategy. Hence proper care and attention need is to be given while determining the capital structure decision. The purpose of this study is to investigate the relationship between capital structure and profitability of five listed cement companies over the past 10 year period from 2006 to 2016. The data has been analyzed by using descriptive statistics and correlation analysis to find out the association between the variables. Result of the analysis show that there is a negative association between capital structure and profitability except the association between debt to equity and return on equity. Present study focus on the association between capital structure and profitability of listed Cement companies. Capital structure is one of the most puzzling issues in corporate finance literature. The concept is generally described as the combination of debt and equity that make the total capital of firms. The proportion of debt to equity is a strategic choice of a finance manager. Capital structure decision is the vital one since the profitability of the enterprise is directly affected by such decision. Hence proper care and attention need to be given while determining capital structure decision. In the statement of the affair of an enterprise, the overall position of enterprise regarding all kind of assets, liabilities are shown.

Type: 
Management
Authors Name: 
Alok Raj Bhatt, Dr. Khyser Mohd