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Asian Journal of Management
Year : 2017, Volume : 8, Issue : 4
First page : ( 1120) Last page : ( 1130)
Print ISSN : 0976-495X. Online ISSN : 2321-5763.
Article DOI : 10.5958/2321-5763.2017.00171.8

Determinants of Capital Structure: A Study of Indian FMCG Sector

Dr. Soni Anil*

Associate Professor, DAV Institute of Engineering and Technology, Kabir Nagar, Jalandhar, 144008

*Corresponding Author E-mail: anil.daviet@gmail.com

Online published on 2 June, 2018.


Financing decisions or capital structure decisions are one of the most important decisions which a firm has to take. There have been a lot of studies on this and there is no consensus about the meaning of an optimum capital structure. In this study an attempt has been made to identify the factors affecting the capital structure decisions of the firms in FMCG Sector in India. The study has been conducted on 15 leading FMCG companies operating in India. All these companies are listed on the Bombay Stock Exchange and are a part of S and P BSE Fast Moving Consumer Goods Index. The study covers a period of 5 years i.e. 2011–12 to 2015–16. For the study, one dependent variable i.e. Debt Equity Ratio and seven independent variables i.e. profitability, tangibility, liquidity, size, business risk, non-debt tax shield and coverage ratio have been used. The correlation and multiple regressions have been used to find out the factors affecting the capital structure of the firms. Out of the seven independent factors, only two factors i.e. liquidity and profitability have been found to be significantly affecting the capital structure.



Capital Structure, Liquidity, Profitability, Business risk, FMCG, NDTS.


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