Capital Structures of the Indian Industrial Sector

Capital Structures of the Indian Industrial Sector Chapter 1 INTRODUCTION 1.1 Introduction Capital is the main factor of every industry, a company start with capital and end with demolition of that capital. So the capital and capital structure are one of the most important terms in every business, Companies have been struggling with capital structures for more than four decades. During credit expansions, companies have been unable to build enough liquidity to survive the contractions, especially those enterprises with unpredictable cash flow streams which end up with excess debt during business slowdowns In this research I am going to Exam the changes in the capital structure of Indian industrial sector, with a special reference to Indian textiles industry .The purpose of this paper is to determine whether firm-specific capital structure determinants in the emerging market of India. support the capital structure theories which were developed to explain the company structures in developed economies. In other words, the main motivatio n for this study is to highlight the role of firm characteristics and industrial sector-specific variables in determining capital structure. This is an attempt to a panel data study of capital structure determinants. Statement of the Problem There is lot of study conducted in the field of capital structure theory but no systematic study with applying econometric model and tools used like panel data are not conducted in India yet. It consist analyzing both time and cross sectional variables. There is No studies are conducted on specified sector. The study by sector wise is more effective than in macro level research which is avoid sector variable. Each industry has its own uniqueness and situations. When taking macro level data set will miss its sector uniqueness. This research is an enquiry through panel data analysis with considering sector as important factors. Specifically researcher tries to answer some questions, firstly which selected factors are more influence in short te rm leverage of a firm, and which is not influence on it . Secondly long term leverage has any determinate in Indian industry and which factors is more influenced in total debt decision. Also questioned extraneous variable like bank rate, inflation rate can make any impact on capital structure. The researcher conduct a pre study for specifying research problem. Pre study The pre study was conducted by analyzing all companies in india by classify these companies in sector wise. Assigning debt equity ratio as variable for prestudy, by Using cmie and Bloomberg database, researcher collect all companies 5year debt equity ratio and classified them in sector wise. Companies arranged under in a Automobiles & ancillaries, Banking, chemical , communication, construction & real estate, construction material, consumer goods sector, energy, food & Agro, hotel & tourism, IT, investment & finance, Machinery, metal, mining ,textiles, transport and wholesale & re tale sectors. Take 5 year averag e of all company and find out standard deviation of each sector. The value arranged below table. Table 1.1 .Result of Pre study Sectors Average Debt on equity Standard deviation Automobiles & ancillaries index 1.06 3.561244 Banking services index 1.53 0.695391 Chemicals & chemical products index 1.53 3.562817 Communication services index 1.54 21.75133 Construction & real estate index 1.92 26.57946 Construction materials index 0.77 23.65846 Consumer goods index 1.72 8.326452 Energy index 1.36 2.520609 Food & agro-based products index 1.45 7.826624 Hotels & tourism index 1.33 18.53691 Information technology index 0.35 1.677905 Investment services index 0.24 1.035782 Machinery index 1.26 7.248118 Metals & metal products index 1.3 16.62944 Pharma 1.63 86.75429 Mining index 0.34 6.509317 Textiles index 2.05 167.5378 Transport services index 1.68 2.88037 Wholesale & retail trading index 1.68 34.62297 In this table textiles sector have very high debt equity and not ordinary deviation between companies. High standard deviation mean that in textile sector, some companies has very low debt and some has very high. It is india’s one of the oldest and major export sector too. Highest deviation and irregularity in debt is not a better sign. So need an attention on capital strucre determinant of Indian textile sector.

Valuation of TESCO PLC Essay Example | Topics and Well Written Essays - 5000 words

Valuation of TESCO PLC - Essay Example Tesco has also entered the US market in 2007 under the name Fresh and Easy and is planning to invest about $500 million for starting a network of 150 stores in the US West Coast. Its retail operations include groceries and food items which accounts for almost 80% of its sales and also has a very profitable online trading business. The company also sells non food items like clothing, electronics, pharmaceuticals, books, insurance, alternative medicines, certain legal services, petrol etc. In terms of turnover Tesco Plc is the fourth largest retailer in the world, the 1st three positions being held by Wal Mart, Carrefour of France and The Home Depot of the USA respectively and ranks 59 in the Fortune Global 500 according to CNNMoney.com. The group has around 3000 stores and employees around 400,000 people worldwide. It is at present the largest employee in Britain in the private sector. The turnover of the company for the twelve months ending December 2007 was  £46 billion and it has increased profit every year except in 1987. As in the case with most fast growing companies Tesco has had its share of accusations and criticism which includes undercutting the competition, exploiting suppliers and workers and of employing child labor in certain markets. Early Days and later expansion: In 1919 John Edward Cohen started a small grocery shop in East London with a thirty pound stipend he received from the Royal Flying Corps. One of the products he sold was a private brand of tea named Tesco, derived from the name of his supplier Mr. T E Stckwell (the first three letters of his name TES and CO from his surname) and he used this as the name of the his store which he opened in 1929 in North London. The company was incorporated as a private limited company in 1932 named Tesco Stores Ltd. His business flourished and a new headquarters was built on a

Political Parties and the Electoral Process Essay - 1

Political Parties and the Electoral Process - Essay Example In considering this topic, it is important to understand the differences between the two major parties, to look at the role that campaigns play in keeping a strong hold on the two-party system, and to explore possible reasons why third-part candidates have never had much success in American Presidential elections. Differences in Ideology Just as family members offer differ amongst themselves in regards to important issues, the two major political parties are no different. While there are some issues that the two surprisingly agree on, there are many ideological differences that have formed through the years, resulting in the huge divide that we see today. Some differences regarding social issues are evident. Democrats, for example, by and large are in opposition to the death penalty, while a substantial majority of Republicans are in support (Newport, 2009). Another social issue that is even more decisive is that of abortion. Democrats overwhelmingly are pro-choice, meaning that they support a women’s right to an abortion. Republicans, on the other hand, are in staunch opposition to abortion and believe that it should be made illegal at the national level. Finally, consider the differences in terms of the scope of government. The Democratic party supports a larger government that provides more government services to the country, while Republicans push for a smaller and more streamlined government that focused on business and private development (Pletka, 2013). Third-Party Candidates, The Electoral Process, and Presidential Campaigns When one is looking at political news in America, it becomes obvious rather quickly that many citizens are unhappy with their political choices. While the two parties offer different choices, many argue that they seem out of touch with the average America. As such, it would stand to reason that a third-party would be possible in the country, yet for decades such a party has tried and failed time after time. The current system is simply stacked against them. Since most financial donor in the country give to one of the two major political parties, they control the campaigns, air time, and debate cycles. It is difficult for a third-party candidate to even wage a serious national campaign. This is largely due to an electoral system that divides the presidential election into separate contests in each of the 50 states. As such, third party candidates cannot even get on the ballot everywhere because they do not have the financial and logical resources to gain support in each of the 50 United States (Schultz, 2009). Because of these and other reasons, such candidates have never really managed to find much traction when waging a national campaign. Conclusion While there is certainly a basis for having a third-party in the United States, conditions simply have not allowed it. Some of this can likely be attributed to voter and political apathy, while the crux of the issue is likely related to money. The reality i s that there are enough ideological differences between the two major political parties in America that it keeps them separate and distinct in the eyes of campaign donors, and the public in general. Add to this the fact the electoral college system views the race for President as a state-by-state contest,