NORMA eResearch @NCI Library

Evaluation of the Impact of Capital Structure Choice on the Firm’s Performance: A Case of Retail Sector in India

Muhammed Jadheer, Thacharakkal Cannoth (2020) Evaluation of the Impact of Capital Structure Choice on the Firm’s Performance: A Case of Retail Sector in India. Masters thesis, Dublin, National College of Ireland.

[img]
Preview
PDF (Master of Science)
Download (648kB) | Preview

Abstract

Purpose
The prime purpose of the research project is to examine the impact of capital structure choices on the performance of retail sector organisations of India. In addition, the research seeks to determine the relationship between financial performance of firms and their capital structure choices to further assess the need to adopt optimal capital structure for reducing liquidity risk and foster long-term growth and sustainability of the retail sector.
Methods/Data Collection/Data Analysis
The researcher utilised quantitative methods to ensure hypothesis testing and meeting research objectives. The deductive approach is applied with the positivism philosophy as well as the descriptive design for finding the way capital structure decisions affect firm performance and profitability. The primary data is gathered through surveying 70 financial decisions makers working in the retail sector of India, and secondary data is acquired through reviewing financial reports of Aditya Birla, Future group and Reliance group and by exploring academic sources. Statistical analysis is used for examining secondary data while the graphical representation method is applied for presenting survey data.
Findings
It is inferred that capital structure choices have a significant impact on organisational performance, so it is essential to choose an optimal capital structure to foster business growth and sustainability within the Indian retail sector. It is found that high debt ratio adversely affects firm performance and aggravates the liquidity risk and bankruptcy risk, which implies that debt and profitability are negatively related to each other.
Implications
The study presents meaningful insights about capital structure choices of retail sector firms and their impact on overall firm performance. Hence, the findings can be taken into consideration for designing an optimal capital structure or while forming capital structure decisions.
Limitations
The research is primarily centred in the Indian retail sector and quantitative analysis, so final results and conclusions cannot be applied in a generalised context. 3 The study produces precise information about core determinants of the capital structure of Indian retail sector firms.
Keywords:
Capital structure choices, India, retail sector, firm performance and optimal capital structure.

Item Type: Thesis (Masters)
Subjects: H Social Sciences > HG Finance > Investment > Capital Formation
H Social Sciences > HD Industries. Land use. Labor > Specific Industries > Retail Industry
Divisions: School of Business > Master of Science in Finance
Depositing User: Mr Kevin Loughran
Date Deposited: 28 May 2021 16:10
Last Modified: 28 May 2021 16:10
URI: http://norma.ncirl.ie/id/eprint/4891

Actions (login required)

View Item View Item