Paper Contents
Abstract
Capital structure refers to the mix of debt and equity used by a company to finance its operations and growth. An optimal capital structure is essential for minimizing the cost of capital and maximizing shareholder value. This study focuses on the analysis of capital structure in selected companies, aiming to understand how different financial strategies influence a firm's performance and risk profile. The research examines key components such as equity capital, preference shares, long-term debt, and retained earnings. It evaluates various financial ratios including debt-equity ratio, interest coverage ratio, and leverage ratios to assess the financial stability and efficiency of capital allocation. By analyzing real-world financial statements, the study highlights how companies balance risk and return in their financing decisions. The role of factors such as industry norms, market conditions, profitability, and taxation in shaping capital structure decisions is also discussed. The findings reveal that companies with a well-balanced capital structure tend to perform better in terms of profitability and market valuation. This research provides valuable insights for financial managers, investors, and policymakers aiming to make informed financing and investment decisions.
Copyright
Copyright © 2025 Dr.P.Lokesh Muni Kumar, Ramya G. This is an open access article distributed under the Creative Commons Attribution License.
