A STUDY ON CAPITAL STRUCTURE AND FINANCIAL PERFORMANCE OF INDIAN TEXTILE INDUSTRY

The Capital structure is one of the most basic and important research fields in theory of corporate finance. Capital structure of an organisation is being affected by many features, and an organisation must try to decide most favorable blend of investment or funding. Even after 57 years of Modigliani and Miller irrelevance theorem, the basic question how firm chooses their capital structure remains unclear. The Indian textile Industry has an overwhelming presence in the economic life of the country. It is the second largest textile industry in the world after China. Apart from providing one of the basic necessities of life the cloth, the textile industry contributes to the country’s industrial output and export earnings. In this paper an attempt is made to identify the impact between capital structure and financial performance of the textile industry.