Jibin J Varghese and Sanjay Sahai
The Capital Structure of a firm affects debt and equity. In this study, an investigation has been made to analyze the impact of capital structure on the selected pharmaceutical company’s financial performance over a period from 2016 to 2020 of 20 BSE listed Pharmaceutical companies are taken based on market capitalization, and the average of all the ratios are calculated and considered. To analyze the considered sample of data, correlation and multiple regression analysis is being used. The findings of the study shows that there is a negative relationship between Capital structures such as Debt Equity Ratio, Debt Ratio, and Profitability Ratios (ROE, ROA, Net Profit Margin) and also a positive relationship between Equity Ratio (Capital structure) and Profitability Ratios (ROE, ROA, Net Profit Margin). Moreover, the capital structures are not statistically influenced by ROE as profitability ratio, but each of the capital structures is statistically influenced by ROA and Net Profit Margin.
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