CAPITAL STRUCTURE AND ITS IMPACT ON FINANCIAL PERFORMANCE OF INDIAN STEEL INDUSTRY

Capital structure is one of the most important area of financial decision making. In this study we attempt to examine capital structure and its impact on financial performance of selected Indian steel Industry during 2007 to 2012. Multiple regression model, correlation matrix, ANOVA and descriptive statistics are performed for the study. We computed OPM, ROA, ROE and ROCE as a indicator of financial performance (dependent variables) and capital structure (TDER, TADR, ICR and FDR) as a independent variables. The result of multiple regression and ANOVA indicated that there is a significant impact of capital structure on financial performance of Indian steel Industry. Correlation results confirmed that there is negative relationship between capital structure and financial performance. The result of the study may guide creditors, companies and policy makers to formulate better policy decision.