“DETERMINANTS OF THE CAPITAL STRUCTURE AND FINANCIAL LEVERAGE: AN ANALYSIS OF SELECTED INDIAN AUTOMOBILE AND FMCG COMPANIES LISTED ON NSE”

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Archana Malik
Research Scholar, Amity School of Business, Amity University, Noida, Uttar Pradesh,India Email: malikarchana61@gmail.com

Dr. Harjit Singh
Associate Professor,Amity School of Business, Amity University, Noida, Uttar Pradesh,India, Email: hsingh12@amity.edu

Dr. Niti Nandini Chatnani
Professor (Finance) at Indian Institute of Foreign Trade (IIFT), New Delhi, India IIFT Bhavan, B-21, Qutab Institutional Area, New Delhi-110016. Email: nitinandini@iift.edu

Vol 17, No 08 ( 2022 )   |  DOI: 10.5281/zenodo.7024328   |   Licensing: CC 4.0   |   Pg no: 572-587   |   Published on: 26-08-2022

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Abstract
A company's capital structure is the "structure" of debt, which is a combination of debt and equity. Profitability, Solvency, Liquidity, and Control are the four pillars of a good capital structure. This paper examines the relationship between financial leverage and the determinants of capital structure of Automobile and FMCG companies listed on the NSE. Data of 15 companies, from each sector, for a period of 10 years from 2009-2019, was studied. Capital structure is the dependent variable. Profitability, asset acquisition cost, growth, size, debt repayment potential, tax rate, debt-free exemption, tangible asset structure, liquidity, uniqueness, and business risk are independent variables. The results of multiple correlation and regression showed that growth factors, business risk, company size and liquidity have a positive effect on capital structure. The findings of this study shall be useful for business administrators of various firms and will guide business managers in makingthe right financial decisions.

Keywords:
Capital Structure, Liquidity, Financial Leverage, Non-debt Tax Shield, Regression Analysis.

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