CAPITAL STRUCTURE AND PROFITABILITY – A COMPARATIVE STUDY BETWEEN AUTOMOBILE COMPANIES IN INDIA

With the help of this study, author wants to represent whether there is any association between capital structure and profitability or not. This study also reveals that what is the effect of capital structure on profitability. Capital Structure refers to the way a corporation finances its assets through some combination of equity, debt, or hybrid securities. Capital Structure shows how a company's assets are built out of debt and equity. It is how a firm finances its overall processes and growth by using different sources of funds whereas Profitability is the capacity of a business to earn a profit. A profit is what is left of the revenue a business generates after it pays all expenses directly related to the generation of the revenue, such as producing a product, and other expenses related to the conduct of the business' activities. For the analysis of the capital structure and profitability, some important ratios are used in-order to check the effect of capital structure on profitability, statistical tool like ANOVA used.