"Analysis of Capital Structure of Pharmaceutical Companies Glaxo India Ltd. & Novartis India Ltd.” – A Comparative Study

Abstract

:  The purpose of this study is to find out why pharmaceutical firms have two different types of capital structures, as well as to gain a better knowledge of the industry by identifying what the future prospects for corporate capital structure variety are. For finance managers, understanding how a company's capital structure impacts its profitability is a challenging task. Despite numerous past researches on the effects of capital structure on corporate profits, few are applicable to Indian firms. This research was performed to further examine the impact of capital structure on the profitability of pharmaceutical corporations Novartis and Glaxo. The data is available for the years 2007 to 2011. The results of the study revealed that financial performance, growth and the magnitude of a company are directly correlated. Both the opposite effects of long and short use and liquidity are evident. For two pharmaceutical companies with differing ownership arrangements, the first big shareholder may be connected with financial success. Comparing India's drug industry with other developing countries' pharmaceutical industries, it is one of the most advanced and technologically advanced in the world. The purpose of this study is to look at how two pharmaceutical companies' capital structures changed over the course of five years. The companies under investigation are Novartis India Ltd. and Glaxo India Ltd., respectively (2007-2011).