Parikalpana: KIIT Journal of Management

Open Access Open Access  Restricted Access Subscription Access

Influence of Capital Structure on Financial Performance


Affiliations
1 Department of Commerce, B.B. Mahavidyalaya, Jajpur, Odisha, India
2 P.G. Dept. of Commerce, Utkal University, Bhubaneswar, India
 

Financing decision is one of the important areas in financial management to increase shareholders’ wealth. Firms can use either debt or equity capital to finance their assets. The purpose of the study is to find out the determinants of capital structure and its impact on financial performance. We have used secondary data and taken 50 top manufacturing companies for our study. Regression model has been used to study the relationship and impact of capital structure on profitability. The study concludes that there is a significant relationship between capital structure and profitability and capital structure has significant impact on financial performance of sample companies.

Keywords

Financial Management, Shareholder’s Wealth, Equity Capital, Debt, Capital Structure, Financial Performance.
User
Notifications
Font Size

  • Babalola, Y.A. (2012). The effect of optimal capital structure on firm’s performances in Nigeria. Journal of Emerging trends in Economics and Management Sciences, Vol. 3, Issue.2, 131-133.

  • Boadi, E.K., & Li, Y. (2015). An empirical analysis of leverage and financial performance of listed non-financial firms in Ghana. International Journal of Economics and finance, Vol. 7, No. 9, 120-135.

  • Goyal, A.M. (2013). Impact of capital structure on performance of listed public sector banks in India. International Journal of Business and management Invention, Vol. 2, Issue. 10, 35-43.

  • Habib, H.J., Khan, F., & Wazir, M.I. (2016). Impact of debt on profitability of firms; evidence from non-financial sector of Pakistan. City University Research Journal, Vol. 6, No. 1, 70-80.

  • Kumar, N.S. (2015). Capital structure and its impact on profitability. International Journal of Science, Technology &nManagement, vol. 04, Issue. 02. 24-30.

  • Mohamed, A., & Inunjariya. (2015). Effect of capital structure on profitability of food and beverage sectors in Srilanka. Epra International Journal of Economic and Business Review, Vol. 3, Issue. 11, 57-63.

  • Movalia, N.P. (2015). A study on capital structure analysis and profitability of Indiantyres industry. Pacific Business Revies Internatioanl, Vol. 8, Issue. 3, 78-82.

  • Ullah, H., Abbas, A., & Iqbal, N. (2015). Impact of capital structure on profitability in the manufacturing and non-manufacturing industries of pakitan. International Letters of Social and Humanistic Sciences, Vol. 59, 28-39.


Abstract Views: 1057

PDF Views: 5




  • Influence of Capital Structure on Financial Performance

Abstract Views: 1057  |  PDF Views: 5

Authors

Chandrika Prasad Das
Department of Commerce, B.B. Mahavidyalaya, Jajpur, Odisha, India
Rabindra Kumar Swain
P.G. Dept. of Commerce, Utkal University, Bhubaneswar, India

Abstract


Financing decision is one of the important areas in financial management to increase shareholders’ wealth. Firms can use either debt or equity capital to finance their assets. The purpose of the study is to find out the determinants of capital structure and its impact on financial performance. We have used secondary data and taken 50 top manufacturing companies for our study. Regression model has been used to study the relationship and impact of capital structure on profitability. The study concludes that there is a significant relationship between capital structure and profitability and capital structure has significant impact on financial performance of sample companies.

Keywords


Financial Management, Shareholder’s Wealth, Equity Capital, Debt, Capital Structure, Financial Performance.

References





DOI: https://doi.org/10.23862/kiit-parikalpana%2F2018%2Fv14%2Fi1%2F173256