LEVERAGE ANALYSIS IN SELECT CEMENT COMPANIES–A COMPARATIVE STUDY

Dr.K. Bhagyalakshmi

Volume : VI, Issue : III, March - 2016

LEVERAGE ANALYSIS IN SELECT CEMENT COMPANIES–A COMPARATIVE STUDY

Dr. K. Bhagyalakshmi

Abstract :

 The employment of an asset or source of funds for which the firm has to pay a fixed cost or fixed return may be termed as Leverage. Consequently, the earnings available to the shareholders as also the risk are affected. The leverage analysis is useful to assess the business risk, financial risk as well as the total risk of the firm. Hence the need is felt to undertake a study on the leverage analysis in terms of Degree of Operating Leverage, Financial Leverage and Combined Leverage in select cement companies namely, Ultra Tech, The India and Ambuja Cements Ltd. during the period of 10 years from 2003–04 to 2012–13. The paper concludes that, the India Cements Ltd. has been suffering from higher Operating, Financial as well as Total risk. of the firm. Hence the need is felt to undertake a study on the leverage analysis in terms of Degree of Operating Leverage, Financial Leverage and Combined Leverage in select cement companies namely, Ultra Tech, The India and Ambuja Cements Ltd. during the period of 10 years from 2003–04 to 2012–13. The paper concludes that, the India Cements Ltd. has been suffering from higher Operating, Financial as well as Total risk.