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VOL. 5, ISSUE 4 (2023)
A study on capital structure and profitability of Nse nifty fifty companies
Authors
Angadi Vardhan, Janet Jyothi Dsouza, Dinesh K
Abstract
This empirical study
investigates the interplay between capital structure decisions and a company's
profitability over a 10-year period (2013-2022) using a sample of 50 stocks
from the National Stock Exchange (NSE). Employing regression analysis and
descriptive statistics, the research focuses on the ratios of debt-to-equity
and debt to total funds as independent variables, while measuring profitability
through Net Profit (NP), Return-on-Capital-Employed (ROCE), Return-on-Equity
(ROE), and Net-Interest-Margin (NIM) as dependent variables. The findings
reveal a positive relationship between capital structure decisions and
profitability indicators, suggesting that businesses may experience increased
profitability with a strategic incorporation of debt in their capital
structure. The implications of these findings extend to informing financial
decision-makers about the potential benefits of optimizing their capital
structure. However, acknowledging the study's limitations is essential for a
nuanced interpretation of the results.
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Pages:23-27
How to cite this article:
Angadi Vardhan, Janet Jyothi Dsouza, Dinesh K "A study on capital structure and profitability of Nse nifty fifty companies". International Journal of Commerce and Economics, Vol 5, Issue 4, 2023, Pages 23-27
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