The Impact of Corporate Leverage on Profitability: Evidence from IT Industry in India
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| Publicado en: | Pacific Business Review International vol. 8, no. 4 (Oct 2015) |
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| Autor principal: | |
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| Publicado: |
Pacific Academy of Higher Education and Research
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| Acceso en línea: | Citation/Abstract Full Text - PDF |
| Etiquetas: |
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| Resumen: | The term 'leverage' is used to utilize the fixed cost or funds to increase the returns to the owners of the firm. The study is an attempt to analyze the determinants of corporate leverage in IT industry in India. In order to test the hypotheses and to address the objectives of the study, the present study has chosen 28 sample firms from IT industry in India, which are listed in National Stock Exchange. The study used correlation and regression analysis to find the relationship and the impact of corporate leverage on profitability. The study proves that there is a significant impact of operating Leverage and Financial Leverage on Return on Net worth. Hence, based on the results, the 1 2study rejects Ho and Ho , revealing that the Operating Leverage and Financial Leverage have impact, of course the Operating Leverage negatively while the Financial Leverage positively, on Return on Net worth of IT Industry as a whole in India. However, the impact o Combined Leverage on Return on Net worth is not significant due to negative impact of Operating Leverage on Return on Net worth. |
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| ISSN: | 0974-438X |
| Fuente: | Asian & European Business Collection |