IMPACT OF CAPITAL STRUCTURE ON PROFITABILITY OF LISTED MANUFACTURING COMPANY
Date
2024
Authors
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Journal ISSN
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Publisher
Shanker Dev Campus
Abstract
This research investigates the relationship between capital structure and profitability
within the context of manufacturing companies, focusing on three prominent entities:
Bottlers Nepal Limited, Unilever Nepal Limited, and Himalayan Distillery Limited. The
study employs a comprehensive analysis of financial data, aiming to discern the influence
of capital structure decisions on the financial performance of these companies.
The research methodology involve a quantitative and approaches. Financial statements
and relevant data spanning a specific time frame are examined to gauge the capital
structure of the selected manufacturing firms. Various financial ratios, such as debt-toequity ratio, interest coverage ratio, and return on equity, are computed to assess the
financial leverage and profitability of the companies.
The findings of this study are expected to contribute to the existing body of knowledge on
the interplay between capital structure choices and profitability in the manufacturing
sector. Insights gained from the analysis may assist practitioners, investors, and
policymakers in making informed decisions related to capital structure management and
optimizing financial performance.
The three chosen companies represent diverse industries within the manufacturing sector,
adding depth to the research by providing insights into how capital structure
considerations impact companies with varying business models. As such, this study not
only sheds light on the specific cases of Bottlers Nepal Limited, Unilever Nepal Limited,
and Himalayan Distillery Limited but also offers broader implications for manufacturing
companies in similar contexts.
Ultimately, the research aims to enhance the understanding of the strategic importance of
capital structure decisions in achieving and sustaining profitability for manufacturing
companies. The findings may be valuable for corporate financial managers, investors, and
other stakeholders seeking to optimize capital structures for improved financial
performance and long-term sustainability.
Keywords : Capital Structure, Profitability, Financial Leverage, Financial Performance