Capital Structure Trends in a Cement Engineering Company

Abstract

Capital structure means the mix of equity and debt. The Finance manger is required to bring balance between different sources of financial resources for maximising return in any company by not altering risk mix. A best capital structure is required to optimize the owner’s Profits in any company. In this research paper, effort is put to examine the capital structure Trends in a Cement Engineering Company namely The Ramco Cements Limited. The Ramco Cements Limited is a main company in Ramco Group. This is a most popular group in Southern India. It is mainly located in Chennai. The important product of this organization is Portland cement. The cement production capacity is 16.45 million tons per year. This Company has a yearly turnover of Rupees 5174.71 Crores as per 2018-19 Accounts. The gross assets of the company are Rupees 8108.21 Crores. In this research paper capital structure Trends in the company for a period of 10 years are examined. Different kinds of Leverages are examined. Debt- Equity (D-E) Ratio, Proprietary Ratio(PR), Solvency Ratio(SR), Fixed Assets(FA) to Net worth(NW) Ratio, Fixed Assets Ratio (FAR), Current Assets(CA) to Proprietary Funds (PF) Ratio and Interest Coverage Ratio(ICR) are prepared for ten years period. Hypotheses’ testing was done through Chi-square. Outcome of the present research will be useful for finding weaknesses in capital structure of the company.