Capital Structure Analysis and its Impact on Firm Performance of Electronic Manufacturing Companies in India

The current study looks at how capital structure affects performance of few Indian electronic manufacturing companies. Decisions on the capital structure of a company are critical to its long-term growth, profitability, and financial stability. Based on secondary information gathered from the annual reports of specific firms listed on BSE and NSE over a five-year period from 2019 to 2024, the study uses a descriptive and analytical research design. Debt–Equity Ratio, Total Debt Ratio, Long-term Debt Ratio, and Short-term Debt Ratio are used to measure capital structure, and Return on Equity (ROE), Return on Assets (ROA), and Earnings per Share (EPS) are used to evaluate firm performance. The data is analyzed using multiple regression analysis, correlation analysis, and descriptive statistics. The findings show a strong negative correlation between leverage and company performance, suggesting that higher debt levels have a detrimental impact on profitability since they raise financial risk and interest costs. In order to improve financial performance and sustainability, electronic manufacturing companies in India should maintain an ideal balance between the debt and the equity, according to findings, which support the trade-off and also pecking order theory related to capital structure. Corporate managers, investors, and legislators can use the study’s insightful findings to create financing plans that work for the electronic manufacturing industry.