Impact of capital structure on financial performance of two and three wheeler companies in India

C Bindu

Authors

Bindu C
bindoosee@gmail.com
Assistant Professor, Department of Commerce Sree Narayana College Cherthala, India

Keywords:

capital structure, financial performance, Return on Equity (ROE), the proportion of long-term debt to total assets (DTA), the ratio of long-term debt to equity (DE)

Abstract

This study aimed to examine the relationship between capital structure and financial performance of two and three-wheeler manufacturing companies in India. The analysis has been carried out by taking into account all the two and three-wheeler manufacturing companies listed in BSE for 10 years from 2007-08 to 2016-17. The econometric model, fixed effects model is used for the analysis as per the Hausman test. The accounting measure, Return on Equity was used for measuring the financial performance. The results revealed that capital structure has a negative influence on the financial performance of these companies.

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