Operating, Financial, And Combined Leverage As Determinants Of Profitability: Evidence From Selected BSE-Listed Pharmaceutical Companies (2016–2025)

Authors: Ms. Pooja Arvindbhai Pandya, Dr. Rajesh A. Mulchandani

Abstract: This study investigates how operating, financial, and combined leverage influence the profitability of selected pharmaceutical firms listed on the Bombay Stock Exchange (BSE) for the years 2016 to 2025. Five top pharmaceutical companies were chosen based on their market capitalization, and the research relies on secondary data gathered from their standalone annual reports. The analysis utilized the Degree of Operating Leverage (DOL), Degree of Financial Leverage (DFL), Degree of Combined Leverage (DCL), and Earnings Per Share (EPS). Descriptive statistics, One-Way ANOVA, and Pearson's correlation were applied to explore the relationship between leverage and profitability. Results indicate there is no significant difference in operating, financial, and combined leverage among the selected companies, while EPS shows a significant difference. The study concludes that maintaining an optimal level of leverage is essential.

DOI: http://doi.org/10.5281/zenodo.21355443