Impact of Capital Structure on Profitability of the Maharatna Companies

Abstract

The relationship between capital structure and profitability of the any organization is an important subject of financial management for growth and continued existence of the company. In this paper we are trying to find out impact of capital structure on profitability of selected firm of oil and power industry of India. The financial performance represented by dependent variables Return on Equity (ROE), Return on Assets (ROA) and Return on Capital Employed (ROCE) is taken into consideration and the effect of independent variables Debt Equity ratio, Interest Coverage ratio. The data are collected of six companies for the time series of 5 year from 2017-20 to-2023-24 is used for this study and the analysis of data is done on the basis of Ratio Analysis and Correlation Matrix which provides a mixed result on relation between capital structure and profitability of the company.