Profitability and Development of Indian firms based on Financial Dynamics
Ankur Agrawal1, Ashish Saxena2, K R Gola3, Sunil Joshi4
1Dr. Ankur Agrawal, Faculty, School of Business Studies, Sharda University, Greater Noida, India.
2Mr. Ashish Saxena , Faculty, School of Business Studies, Sharda University, Greater Noida, India.
3Dr. K R Gola, Faculty, School of Business Studies, Sharda University, Greater Noida, India.
4Prof. (Dr.) Sunil Joshi, Faculty, School of Business Studies, Sharda University, Greater Noida, India.
Manuscript received on March 15, 2020. | Revised Manuscript received on March 24, 2020. | Manuscript published on March 30, 2020. | PP: 4204-4209 | Volume-8 Issue-6, March 2020. | Retrieval Number: F9234038620/2020©BEIESP | DOI: 10.35940/ijrte.F9234.038620
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: The Judicial blend of debt and equity at which cost of capital is least and estimation of the firm is most maximum is named as optimal capital structure of a firm. The capital structure decision can impact the estimation of the firm through the profit accessible to the investors which amplify the investors’ wealth, notwithstanding this capital structure can influence the estimation of the organization by improving its expected income. Hence, the debt ratio changes when there is an irregularity between inside assets and genuine speculation openings and there is data asymmetry in the market. The significance of a proper capital structure is, along these lines, self-evident. Primary variables affecting Capital Structure have been examined right now distinguish the degree of their capital structure impact. The fundamental reason for existing is to look at the effect of “ten financial factors” in particular: profitability, size, risk in the business, asset structure, debt service, development, office cost, bankruptcy ratio, charge shield in tax and uniqueness on the capital structure of chosen organizations, which is spoken to by LEV D/E. Ten unique divisions from Indian corporate have been picked, to break down the significant determinants of capital structure. The information has been drawn from the official sites of the organizations for a time of 2008 to 2018; the information has been gathered for 400 recorded organizations from ten chose segments with the end goal of investigation. Multiple regressions have been applied to discover the noteworthy determinates. Profitability, Growth and Development of the firm, size have pivotal and positive relationship with leverage.
Keywords: Capital Structure, leverage, profitability, asset structure, business risk, debt service, agency cost, bankruptcy ratio, growth and uniqueness. Paper Classification: Research Paper
Scope of the Article: Classification.