A Study on Relationship Between Leverage and Profitability – A Case of Food Industries in India
Vaishnavi Deshpande
Vaishnavi Deshpande, Student, pursuing B.B.A. LL.B. (Hons.) at School of Law, Narsee Monjee Institute of Management Studies, Indore (Madhya Pradesh). India.
Manuscript received on 23 February 2023 | Revised Manuscript received on 01 April 2023 | Manuscript Accepted on 15 May 2023 | Manuscript published on 30 May 2023 | PP: 19-23 | Volume-3 Issue-1, May 2023 | Retrieval Number: 100.1/ijef.C2514051322 | DOI : 10.54105/ijef.C2514.053123
Open Access | Editorial and Publishing Policies | Cite | Zenodo | Indexing and Abstracting
© The Authors. Published by Lattice Science Publication (LSP). This is an open-access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: In financial management, Leverage is the key decision area. Leverage constitutes the Degree of Operating Leverage, Degree of Financial Leverage and Degree of Combined Leverage. In this paper, the relationship between Leverage and Profitability has been discussed. For this study, data from the financial year (FY) 2020 have been considered. Approximately 10 companies in the food industry, listed on the Bombay Stock Exchange, have been selected for this study. An exploratory research design is employed, utilising secondary data. The data was collected from the annual reports of the chosen companies. The data collected has been analyzed by using the regression tool. The primary objective of this study is to analyse the performance of the 10 selected companies.
Keywords: Profitability, Operating Leverage, Financial Leverage, Combined Leverage.
Scope of the Article: Investments, Derivatives