Impact of Leverage on Profitability: A Study of Sabar Dairy
| Vol-1 | Issue-3 | October-2014 | Published Online: 05 October 2014 PDF ( 101 KB ) | ||
| Author(s) | ||
| Dr. J. B. Patel 1 | ||
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1Principal, N.C.Bodiwala and Prin.M.C.Desai Commerce College, Kalupur, Ahmedabad, Gujarat (India) |
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| Abstract | ||
The purpose of this paper is to study and understand the impact of leverage on the profitability of Sabar Dairy. The present study examines the relationship between return on capital employed (ROCE), return on equity (ROE), return on assets(ROE) and earnings per share(EPS) with operating leverage, financial leverage and total leverage. A data of Sabar Dairy is examined for the period 1985-86 to 2013-14. The empirical findings the result of regression indicates that the coefficient of DOL, DFL and DTL is positive with ROCE but not significant. However, the overall model is statistically significant; the coefficient of DOL, DFL and DTL is positive with ROE but not significant. However, the overall model is statistically significant, the coefficient of DOL and ROA is significant positive, coefficient of DFL and ROA is negative and coefficient of DTL and ROA is positive but not significant. However, the overall model is statistically significant and the coefficient of DOL, DFL and DTL is positive with EPS but not significant. However, the overall model is statistically |
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| Keywords | ||
| Degree of financial leverage, Degree of operating leverage, Earnings per share, Return on assets, Return on capital employed, , Return on equity. | ||
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