Determinants of Capital Structure-A Study of Oil Industry in India

The Study aims to analyze the to what extent accounting variables that is financial strength, long term profitability, Tangibility of assets, Business risk and solvency effect capital structure of oil companies listed on National Stock Exchange in India. For this leverage is taken as a dependent variable and all other accounting variables are taken as an independent variable. Using Panel Data Analysis on ten companies from April 1, 2006 to March 31, 2015. Annual reports for the selected companies for this specific period would be used. The result shows that accounting variable like financial strength is positively related to leverage and other variables are negatively related to the dependent variable. It has also been found that all the explanatory or accounting variables are important determinant of capital structure. Also that companies use different strategies for forming their capital structure irrespective of the fact that they belong to the same industry. Once the capital structure is formed there is no significant changes in capital structure over the years are found.