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2014•Unpublished venueRequires access

IMPACT OF CAPITAL STRUCTURE ON FINANCIAL PERFORMANCE IN INDIAN CONSTRUCTION COMPANIES

Naresh Kumar

Open publisher page 8 citations

Abstract

This study examines the capital structure of selected construction companies in India between the periods 2009 to 2013. Emphasis has been laid to show the impact of capital structure on the financial performance of Indian construction companies listed in the Bombay Stock Exchange. For the study purpose, the data has been collected from the secondary sources i.e. from the annual reports of the selected sample companies. Multiple Regression and correlation is used to analyze the data. The variables used for the study are Debt Equity Ratio, Long term debt and Debt Asset Ratio as the independent variable and Gross Profit Margin (GPM), Net Profit Margin (NPM), Return on Capital Employed (ROCE), Return on Assets (ROA) and Return on Equity (ROE) as the dependent variables. The result revealed that there is a positive relationship between the capital structure and financial performance of the selected firms.

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What this paper is about

This study examines the capital structure of selected construction companies in India between the periods 2009 to 2013. Emphasis has been laid to show the impact of capital structure on the financial performance of Indian construction companies listed in the Bombay Stock Exchange. For the study purpose, the data has been collected from the secondary sources i.e. from the annual reports of the selected sample companies. Multiple Regression and correlation is used to analyze the data. The variables used for the study are Debt Equity Ratio, Long term debt and Debt Asset Ratio as the independent variable and Gross Profit Margin (GPM), Net Profit Margin (NPM), Return on Capital Employed (ROCE), Return on Assets (ROA) and Return on Equity (ROE) as the dependent variables. The result revealed that there is a positive relationship between the capital structure and financial performance of the selected firms.

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Available abstract

This study examines the capital structure of selected construction companies in India between the periods 2009 to 2013. Emphasis has been laid to show the impact of capital structure on the financial performance of Indian construction companies listed in the Bombay Stock Exchange. For the study purpose, the data has been collected from the secondary sources i.e. from the annual reports of the selected sample companies. Multiple Regression and correlation is used to analyze the data. The variables used for the study are Debt Equity Ratio, Long term debt and Debt Asset Ratio as the independent variable and Gross Profit Margin (GPM), Net Profit Margin (NPM), Return on Capital Employed (ROCE), Return on Assets (ROA) and Return on Equity (ROE) as the dependent variables. The result revealed that there is a positive relationship between the capital structure and financial performance of the selected firms.

Key concepts: Return on equity, Return on capital employed, Debt-to-equity ratio, Debt-to-capital ratio, Return on assets, Capital structure, Return on capital, Debt ratio

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IMPACT OF CAPITAL STRUCTURE ON FINANCIAL PERFORMANCE IN INDIAN CONSTRUCTION COMPANIES — Research Paper | ScholarLens