Impact of Profitability on Capital Structure of NSE Listed Pharmaceutical Indexed Companies

Author:Md. Irshad Ali Tanwar a*, Akhil Kumar Mittalb

Abstract:
This study is tried attempt to explore the impact of profitability on capital structure of indexed NSE pharmaceutical companies of India for the period of 5 years (2017-18 to 2021-22). Nifty pharma indexed containing 20 companies and sample covers 10 out of 20 Pharmaceutical companies of indexed NSE pharmaceutical companies of India. The study used regression analysis to find the effect of capital structure on Net profit, Return on Assets, and Return on Capital Employed. Regression analysis applied to check the relationship of data collected. This study reveals the influence of independent variable such as Return on Asset, Return on Equity, Return on Capital Employed and Net Profit Ratio analysed with respect to the debt equity ratio. From the analysis, it is found that the net profit, ROCE and ROE were positively associated but ROCE was not statistically significant. In addition to this, ROA were negatively associated and statistically significant.

Keywords:Key Words: Capital Structure, Return on Equity, Profitability Ratios, Indian Pharmaceutical Industry, ROCE, ROA.

DOI:10.46333/ijtc/11/2/8

International Journal of Trade & Commerce (Vol: 11 Issue:2)