International Journal For Multidisciplinary Research

E-ISSN: 2582-2160   •   Impact Factor: 9.24

A Widely Indexed Open Access Peer Reviewed Multidisciplinary Bi-monthly Scholarly International Journal

Call for Paper Volume 7, Issue 4 (July-August 2025) Submit your research before last 3 days of August to publish your research paper in the issue of July-August.
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Evaluating the Impact of Capital Structure on Firms Performance

Author(s) Dr. Ravi chandra Reddy, Ms. Bhuvanashree G
Country India
Abstract The capital structure of a firm is a mix of debt and equity financing plays a pivotal role in determining its overall financial performance. This study aims to evaluate the impact of capital structure decisions on the performance of firms across selected key sectors. With an increasing focus on maximizing shareholder value and maintaining financial stability, understanding the relationship between leverage and performance indicators such as Return on Equity, Return on Assets, and Earnings Per Share has become essential. Using secondary data and statistical tools like comparative analysis, this research examines how different levels of debt influence firm profitability, efficiency, and market valuation. The study is grounded in financial performance ratios and profitability ratios which provide deeper insights into financing behavior. The results reveal that a balanced capital structure can positively affect firm performance, while excessive reliance on debt may lead to financial risk and decreased profitability. This paper offers valuable recommendations for financial managers and policymakers to optimize capital structure decisions in alignment with long-term strategic goals. Ultimately, the findings contribute to a better understanding of how financial structuring impacts business success in today’s dynamic economic environment
Keywords Financial Performance, Capital Structure, ROE, ROA, EPS, EBIT, Interest Coverage Ratio.
Field Business Administration
Published In Volume 7, Issue 3, May-June 2025
Published On 2025-06-30
DOI https://doi.org/10.36948/ijfmr.2025.v07i03.49714
Short DOI https://doi.org/g9r78k
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