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 March 2022 | Revised Manuscript received on 31 March 2022 | Manuscript Accepted on 15 May 2023 | Manuscript published on 30 November 2023 | PP: 19-23 | Volume-3 Issue-1, May 2023 | Retrieval Number: 100.1/ijef.C2514051322 | DOI : 10.54105/ijef.C2514.053123
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© 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 the purpose of this study, data of financial year (FY) 2020 has been considered. About 10 companies in the food industry which are listed in the Bombay Stock Exchange have been chosen for this study. An exploratory form of research design is used which is based on the 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 main aim of this study is to analyse the performance of the 10 companies, chosen.
Keywords: Profitability, Operating Leverage, Financial Leverage, Combined Leverage.
Scope of the Article: Investments, Derivatives