Impact of Capital Structure on Financial Performance of Indian Steel Industry: An Empirical Study

Abstract

Capital structure refers to the decision in which assets and investment of the company is financed through combination of debt and equity. The optimal ratio of debt and equity reduces the risk of insolvency and remain profitable. The aim of this paper is to investigate empirically the impact of capital structure on the financial performance of Indian Steel industry. The data were collected from the annual reports and accounts of the respective companies. The study was conducted for the period of ten years starting from 2008-09 to 2017-18 taking 20 Indian Steel companies. For the accomplishment of the objective, various accounting ratios and statistical tools have been applied.

Key Words:Capital Structure, Determinants, Profitability