An empirical analysis of financial leverage and it's components with special reference to ultratech cement industy

Corporations raise their equity by different methods. Decision making on the choice of better methods is a challenge which most financial managers of corporations has to face. The Cement Industries are heavy capital intensive and low labour intensive in nature with tremendous consumption of energy. Required law material is available in plenty and quite easily, therefore the burden of debt is considerably reduced. Equity capital is same through out the period of study on one hand and on other, financing through debt in controlled manner is the basic nature of financing in cement industry. Inspite of the constant nature of equity capital we find increase of return on Equity through increase in reserves and surplus and thereby increase in net worth. We find the most efficient use of financial leverage in the cement industry to maintain their steady earnings. This paper attempts to make an empirical study of theoretical approaches and practical application of financial leverage in cement industry.