Capital Structure and Financial Performance of Selected Cement Companies in India: An Analysis

Abstract

The term capital structure refers to the relationship between the various long-term forms of financial such as debenture,
preference share capital and equity in financing the firm’s assets is very crucial problem in every business and as a general rule
there should be a proper mix of debt and equity capital in financing the firm’s asset. The use of long-term fixed interest-bearing
debt and preference share capital along with equity shares is called financial leverage or trading on equity.
Financial performance analysis is the process of identify the financial strength and weakness of the firm by properly
establishing the relationship between the items of balance sheet and profit and loss account. It also helps in short-term and longterm
forecasting and growth can be identified with the help of financial performance analysis. The dictionary meaning of
‘analysis’ is to resolve or separate a thing in to its element or components parts for tracing their relation to the things as whole and
to each other. The analysis of financial statement is a process of evaluating the relationship between the component parts of
financial statement to obtain a better understanding of the firm’s position and performance. This analysis can be undertaken by
management of the firm or by parties outside the namely, owners, creditors, investors. An attempt is made in this study to analyze
capital structure and financial performance of selected cement companies in India.