An Empirical Study of Debt-Equity Mix and its Impact on Earnings Per Share of Selected FMCG Companies in India

The choice of debt-equity mix is the most significant strategic financial decision since it directly impacts an organization’s profitability. This research explores how the debt-equity mix affects earnings per share (EPS) in India’s FMCG sector. The study analyses data from five major FMCG companies listed on the NSE over a ten-year span (2016 -2025), utilizing statistical tools such as multiple regression, descriptive statistics, and correlation analysis. Results indicate that higher debt levels and strong interest coverage are positively associated with EPS, whereas a higher equity ratio tends to reduce earnings per share (EPS). these outcomes highlight the importance of maintaining an optimal debt-equity balance to enhance shareholder returns. The findings offer practical value to investors, financial strategists, and policymakers aiming to improve company performance through debt-equity mix decisions. However, the study’s conclusions are limited by its small sample size and dependence on secondary data.

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Publication Details

Journal
International Journal of Advanced Research in Commerce Management & Social Science
Published
2025-09-26
DOI
https://doi.org/10.62823/ijarcmss/8.3(ii).7978
Primary Topic
Working Capital and Financial Performance
Type
article
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article

An Empirical Study of Debt-Equity Mix and its Impact on Earnings Per Share of Selected FMCG Companies in India

Bhavsinh M. Dodia, Sapara Rajeshbhai
International Journal of Advanced Research in Commerce Management & Social Science
Working Capital and Financial Performance
article

An Empirical Study of Debt-Equity Mix and its Impact on Earnings Per Share of Selected FMCG Companies in India

Bhavsinh M. Dodia, Sapara Rajeshbhai
article en

Abstract

The choice of debt-equity mix is the most significant strategic financial decision since it directly impacts an organization’s profitability. This research explores how the debt-equity mix affects earnings per share (EPS) in India’s FMCG sector. The study analyses data from five major FMCG companies listed on the NSE over a ten-year span (2016 -2025), utilizing statistical tools such as multiple regression, descriptive statistics, and correlation analysis. Results indicate that higher debt levels and strong interest coverage are positively associated with EPS, whereas a higher equity ratio tends to reduce earnings per share (EPS). these outcomes highlight the importance of maintaining an optimal debt-equity balance to enhance shareholder returns. The findings offer practical value to investors, financial strategists, and policymakers aiming to improve company performance through debt-equity mix decisions. However, the study’s conclusions are limited by its small sample size and dependence on secondary data.

International Journal of Advanced Research in Commerce Management & Social ScienceVol. 08(03(II))
Openalex Percentile: Top 62%
Working Capital and Financial Performance
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An Empirical Study of Debt-Equity Mix and its Impact on Earnings Per Share of Selected FMCG Companies in India — Bhavsinh M. Dodia, Sapara Rajeshbhai · International Journal of Advanced Research in Commerce Management & Social Science (2025) | TGRS Research Map | TGRS