• Dr Gurnam Singh Rasoolpur

This research paper examines the capital structure practices of developing countries through a case study of Indian corporate sector by classifying the capital structure of sample companies by operating leverage. The present study, although, an exploratory effort is limited to 298 out of top 500 private sector manufacturing firms selected for ten years on the basis of sales turnover for the year 2004-2005, published in Business Today. The study reveals that with the rise in operating leverage ranges, the number of companies starts shifting to 0-100 percent broader capital structure range by 83.33 percent up to 4-5 operating leverage range thereafter declines and reaches to 22.22 percent in more than 10 operating leverage range during 1996-97. However, rising trend has been observed in this broader capital structure range during 2005-06 under study. It is observed that around 93 percent and 7 percent companies are lying in 0-200 percent and more than 200 percent capital structure ranges during 1996-97 while around 89 percent and 11 percent companies are also lying in same capital structure ranges for the variable under study during 2005-06, respectively under study. In brief, it has been observed that with the rise in operating leverage ranges, the number of companies is not moving from higher capital structure ranges towards lower capital structure ranges under the four broader categories of capital structure ranges during the period under study. Overall, rise in operating leverage results in no shrinkage of number of capital structure ranges during the period under study. So, it emerges that at all operating leverage ranges, there exists almost same capital structure ranges, which represents no relationship between capital structure and operating leverage during the study period.

Capital Structure, Operating Leverage, Shrinkage

"IMPACT OF OPERATING LEVERAGE ON CAPITAL STRUCTURE PRACTICES: AN EMPIRICAL EVIDENCE", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.5, Issue 6, page no.460-469, June-2018, Available :http://www.jetir.org/papers/JETIR1806863.pdf

"IMPACT OF OPERATING LEVERAGE ON CAPITAL STRUCTURE PRACTICES: AN EMPIRICAL EVIDENCE", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.5, Issue 6, page no. pp460-469, June-2018, Available at : http://www.jetir.org/papers/JETIR1806863.pdf