Rapport Between Leverage and Profitability: A Study of TVS Motor Company
Journal of Finance and Accounting
Volume 6, Issue 2, March 2018, Pages: 49-55
Received: Mar. 12, 2018;
Accepted: Apr. 9, 2018;
Published: May 11, 2018
Views 883 Downloads 67
Gautam Sen, Department of Commerce,Assam Don Bosco University,Guwahati, India
Ravi Ranjan, Amity College of Commerce, Amity University, Gurgaon, India
Follow on us
Leverage analysis can be defined as a process of identifying the financial strength and weakness of a firm from the available data and financial statements. A firm needs funds so run and manage its activities. The funds are needed to set up an enterprise and then to implement expansion, diversification and other plans. A decision has to be made regarding the composition of funds. In this paper an attempt has been made to analyze the impact of leverage on the profitability and performance of the company. For the purpose of the study TVS motor Co. has been selected and for analysis purpose the basic statistical tools like Mean, SD, CV, CAGR, ANOVA(one way) have been used and in order to measure the impact the OLS simple Linear regression model has been used, the study covers a period of ten years from 2006 to 2016. Results suggested that the operating, financial and combined leverage of the company does not play any major role in making investment decisions of the company. And it was also found that the financial, operating and combined leverage of the company has no significant impact on ROA (Return on Assets) and Risk Adjusted (SHROA) of the company.
Roa, Shroa, Liquidity, Leverage & Risk
To cite this article
Rapport Between Leverage and Profitability: A Study of TVS Motor Company, Journal of Finance and Accounting.
Vol. 6, No. 2,
2018, pp. 49-55.
Copyright © 2018 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/
) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Alkhatib, K. (2012). The Determinants of Leverage of Listed Companies. International Journal of Business and Social Science, 3(24), 65-73.
Baggs, J., & James, A. (2005). Trade Liberalization, Profitability and Financial Leverage. Analytical Studies Branch Research Paper Series, 24(2), 3rd ser., 283-287.
Fengju, X., Fard, Y. R., Mehar, G. L., &Akhteghan, N. (2013). The Relationship Between Financial Leverage and Profitability with an emphasis on Income Smoothing in Iran’s Capital Market. European Online Journal of Natural and Social Sciences, 2(3), s, 154-164.
Gupta, S. K., & Sharma, R. K. (2011). Financial Management. Delhi: Kalyani Publisher.
Javed, H. Z., Rao, H., Akram, B., &Nazir, F. M. (2015). Effect of Financial Leverage on Performance of the Firm: Empirical Evidence from Pakistan. SPOUDAI Journal of Economics and Business, 64(1), 2nd ser., 87-95.
Khan, M. K., & Jain, P. K. (2010). Financial Management. Delhi, Delhi: TataMegraw – Hill Publishing Company Ltd.
Khedkar, B. E. (2015). A Study of Leverage Analysis and Profitability for Dr Reddy’s Laboratories. International Journal of Research in Engineering and Social Sciences, 5(5), 93-97.
Maheswari, S. N. (2009). Management Accounting and FinancialControl. Delhi: Sultan Chand & Sons
Ojo, S. K. (2012). The Effect of Financial Leverage on Corporate Performance of Some Selected Companies in Nigeria. Canadian Social Science, 8(1), 85-91.
Reddy, T. S., Parasad, H., & Reddy, Y. (2010). ManagementAccounting. Chennai: Margam Publications.