Impact of capital structure on profitability: Evidence from Indian automobile companies

Abstract

The relative proportion of various sources of funds used in a business is termed as financial structure. Capital structure is a part of the financial structure and refers to the proportion of the various long-term sources of financing. It is concerned with making the array of the sources of the funds in a proper manner, which is in relative magnitude and proportion. The secondary data of the companies for a period of 2011–12 to 2016–17 were taken from the annual report of the companies. The impact of various variables on profitability were measured with multiple regression technique and four variables of capital structure i.e. DER, PRopR, FAOE, SR were selected that has impact over the profitability in the Indian automobile companies.