IMPACT OF CAPITAL STRUCTURE ON PROFITABILITY OF LISTED MANUFACTURING COMPANY

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