Published Online:December 2024
Product Name:The IUP Journal of Financial Risk Management
Product Type:Article
Product Code:IJFRM051224
Author Name:K Srinivasan and Rubini S
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:64-73
The Indian textile industry plays a crucial role in the economy, contributing significantly to GDP, employment, and exports. This study examines the equity and leverage structure of ten leading textile companies listed on Indian stock exchanges to understand their financial performance and risk exposure. Equity analysis assesses shareholder ownership and its impact on profitability, while leverage analysis evaluates the extent of debt financing and its influence on financial stability. Using statistical tools like chi-square, correlation, and regression analysis, the study finds that while equity concentration and debt-to-asset ratio do not significantly impact profitability, a higher debt-to-equity ratio is positively correlated with financial performance. The findings provide valuable insights for investors, policymakers, and industry leaders in making informed financial decisions. The study highlights the importance of maintaining an optimal balance between equity and leverage to enhance financial stability and competitiveness in the dynamic textile industry.
The Indian textile industry is one of the oldest and most significant sectors contributing to industrial production, employment, and exports. Over centuries, the textile sector has been the country’s backbone making available sources of occupation and export returns (Javeed and Tabassam, 2018).