Volume : II, Issue : III, December - 2012

Capital Structure and its Impact on Profitability in Select Software Companies in South India

K. Nirmal Kumar Reddy

Abstract :

Capital structure refers to the mix of various components in the capital of a company. The present paper is an attempt to study capital structure and its impact on profitability in select software companies in South India. In South India there are 20 software companies that are listed in Bombay Stock exchange. Out of these 10 companies were purposively chosen to study the capital structure of the individual companies and its impact on profitability of the said companies. The companies selected are hexaware technologies ltd, micro technologies (india) ltd, kpit cummins infosystems limited, zensar tech, infotech enterprises ltd, cmc ltd, wipro ltd, tata elxsi, polaris lab ltd, and financial technologies (india) ltd for a period of ten years from 2002 to 2011. In the above companies the components of debt, equity and the percentage composition of debt in total equity is analyzed. Profitability is measured by taking debt as a per centage of equity, Profit before tax as a per centage of capital employed and profit after tax as a per centage of capital employed. Interest as a percentage of gross profit and interest as a per centage of total income is further calculated for better analysis.

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Article: Download PDF   DOI : 10.36106/ijar  

Cite This Article:

K.nirmal Kumar Reddy Capital Structure and its Impact on Profitability in Select Software Companies in South India Indian Journal of Applied Research, Vol.II, Issue.III December 2012

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