1Assistant Professor, Commerce Department, Kamala Nehru College, University of Delhi, New Delhi, India
2Assistant Professor, Commerce Department, Zakir Husain Delhi College Evening, University of Delhi, New Delhi, India
3Student, Master of Science in Economics, TERI University, India
Online published on 17 July, 2017.
The aim of this paper is to empirically test the relationship between capital structure and profitability of Indian manufacturing companies listed at National Stock Exchange (NSE) for the period 2011–2015. Fixed effect panel regression model is used to estimate the relationship between the two. The results reveal a significantly positive relation between the ratio of short-term debt to total capital employed and ROA i.e. Return on Total assets. Similar results are found for ratio of totaldebt to total capital employed and ROA. However, with regard to the relationship between long-term debt and ROA, the results show a positive but insignificant association between the two.
Capital structure, Profitability, Panel Data, India
