Impact of capital structure and turnover ratios on shareholders’ return: A study of automobile industry in India

The study investigated the relationship of capital structure and turnover ratios on shareholders’ returns of National Stock Exchange listed automobile firms in India during the sixteen year period from 1999 to 2014. Previous studies showed that there is a positive, negative or no relationship of capital structure and turnover on profitability. The present study used return on assets and return on equity as the measures of shareholders’ returns. The results revealed that, automobile companies have higher and more stable ROE than ROA and the capital structure as well as turnover ratios influence shareholders’ returns in a better way when it is measured as return on asset compared to return on equity. The study finds significant and positive impact of LTD to Equity and LTD to total assets on shareholders’ returns. There is significant and negative impact of DER and DAR on shareholders’ returns. The study also finds that there is significant and positive impact of inventory turnover ratio, receivables turnover ratio, and total assets turnover ratio and insignificant impact of working capital turnover ratio on shareholders’ returns.