Authors: Ronit Arora, Dr. Alka Chaudhary
Abstract: Specifically, the purpose of this study is to investigate the impact that the capital structure of publicly traded companies in India has on the actual financial performance of those companies. What constitutes a company's capital structure is the proportion of debt to equity that it employs in order to finance its expansion and day-to-day operations. This is an important decision because it affects profits, risk, and the long-term survival of the business. The management of a company needs to make a significant financial decision in order to decide how to find the optimal balance between the various ways to make money. Over a period of ten years, from 2014 to 2024, the research investigates one hundred non-financial companies that are listed on the National Stock Exchange (NSE). You can determine how well a company is doing financially by looking at its Return on Assets (ROA), Return on Equity (ROE), and Net Profit Margin (NPM). These metrics are all broken into three categories. Determining the capital structure can be accomplished through the use of a number of different ratios, including the debt-to-equity ratio, the long-term debt ratio, and the short-term debt ratio. For the purpose of analyzing the connections between a wide range of factors, the research utilized panel data regression techniques, more specifically Fixed Effects and Random Effects models.
DOI:
