Capital Structure and Profitability: A Analytical Study of Selected steel Companies of Chhattisgarh state

STEEL production is directly correlated with the growth of the country’s economy. India is the 2nd largest producer of the steel in the world after China and is only marginally ahead of Japan in 2018.Chhattisgarh state is the 3rd largest producer of steel in India. Efficiency of all industry are determined with its ability to earn profit, optimize return on assets and give maximum return against its net worth. On the other hand the proportion of debt to equity plays an important role in determining the cost of capital. The interest component helps to reduce tax burden to a certain limit and after the particular point its cost outweighs the benefitThe study has concluded using correlation techniques that in the case of the studied companies of Chhattisgarh state there is positive correlation for the study period among debt to equity and net profit ratio. Also, there is positive correlation for the study period among debt to equity and operating profit ratio on the other hand, there is negative correlation of debt to equity ratio with the return on capital employed and return on net worth ratio. Using the ANOVA one factor technique it was found that in case of debt equity ratio, return on net worth ratio and return on capital employed ratio there is not significant difference in terms of difference over the years between companies or among the companies for the years studied. However, with respect to net profit ratio while there is no significant difference between the companies but there is significant difference between the years as shown by the ANOVA test. the study period was from 2014-15 to 2018-201.