A Study on Relationship Between Leverage and Profitability – A Case of Food Industries in India

Abstract

In financial management, Leverage is the key decision area. Leverage constitutes the Degree of Operating Leverage, Degree of Financial Leverage and Degree of Combined Leverage. In this paper, the relationship between Leverage and Profitability has been discussed. For the purpose of this study, data of financial year (FY) 2020 has been considered. About 10 companies in the food industry which are listed in the Bombay Stock Exchange have been chosen for this study. An exploratory form of research design is used which is based on the secondary data. The data was collected from the annual reports of the chosen companies. The data collected has been analyzed by using the regression tool. The main aim of this study is to analyse the performance of the 10 companies, chosen.