A Study on Capital Structure and Profitability of Cement Companies in Telangana

Capital is considered to be life-giving force to an economic entity and managing capital one of the most important functions of corporate management. Capital structure defines the short-term financing requirements of a firm which includes maintaining optimum balance of capital components-receivables, inventory and payables-and using the cash efficiently for dayto-day operations. The main objectives of this study are to examine and evaluate the capital structure and profitability analysis in cement Industry units and to examine the management of inventory, profitability position and receivables management. This also finds the relationship between capital efficiency and profitability. An empirical research in financial position of a firm is a concept that is gaining serious attention all over the world because of the current financial turmoil and the state of the world economy. The concern of business owners and managers all over the world is to devise a strategy which will help in maintaining balance in financial position as well as to increase profitability and shareholder's wealth. Profitability is perceived as the debt paying ability of a going concern. It is the ability of a company to meet the short term obligations. Hence, it is of utmost importance to keep a constant eye on financial position of the company as without it the company cannot survive. In this paper a comparative study on the capital structure of three leading cement companies has been done to know the profitability position of the companies. The study covers a period of 5 years (2010–2015)of Ambuja Cements Ltd, Kesoram Cement, Anjani Portland Cement Ltd.