Abstract
The purpose of the study is to analyse the change in capital structure of Maruti Suzuki India Limited during the time of COVID-19. The main objective of the study is to analyse the key determinants of capital structure of a company before and during pandemic period. In order to analyse the capital structure of Maruti Suzuki India Limited, the ratio analysis has been used. The ratio includes capital gearing ratio, leverage, debt equity ratio, total investment to long-term liabilities, ratio of fixed assets to funded debt, ratio of current liabilities to proprietors' funds, ratio of reserve to equity capital, and interest coverage ratio. The study covers the period of five years, and it is based on secondary data obtained from the published annual report of Maruti Suzuki India Limited. From the analysis, it shows that the overall capital structure of the company is satisfactory during the study period. However, the company performance in the pandemic period is good.
TopReview Of Literature
For purpose of the study the researcher has reviewed many national and international research articles relating to capital structure of the company. It has been presented as follows:
Aishwarya, Sudharani R., and Dr. N. Suresh (2020) made a study on the impact of capital structure on profitability of companies listed on the Indian stock exchange with respect to the automobile industry. The research helped in understanding both the positive and negative impact of capital structure on profits of Indian automobile companies by using variables like return on capital employed, return on long-term funds, return on net worth, gross profit margin, operating profit, and return on asset. The study hypothesis showed that ROCE, ROLT, and RONW had a positive effect and GP, OP, and ROA had a negative impact on debt equity and interest coverage ratios, and the study also proved that the relationship between profitability and capital structure variables was strongly significant. Fixed effect and random effect models were used to evaluate the hypothesis using data from 17 automobile companies covering 10 years (2010 – 2019). The result of the study was recommended that the firms improve their performance by using an optimal capital structure. Similarly, a fair mix of debt and equity should be established to ensure that the firm maintains capital adequacy.