| SMART JOURNAL OF BUSINESS MANAGEMENT STUDIES |
VOL. 1 |
NO. 1 |
PAPER 8 |
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CAPITAL STRUCTURE IN SUGAR MILLS: (A comparative study of the Cooperative, Government and Private Sector mills) |
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| S. Mohan |
| Reader in Commerce, SKSS Arts College, Thirupanandal, India |
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| A capital - intensive industry like sugar mills required a colossal
amount of funds for investments and growth. A sugar mill, having
determined its investment policy, should plan for its capital structure.
Capital structure decision is an important area of financial
decision-making that has direct impact on cost of capital, profitability
and market value of an enterprise. The objective of this paper is to
examine the capital structure pattern of the sugar mills for which
purpose three mills have been selected from the Thanjavur District
covering all the three sectors, namely, private, government and
cooperative. The analysis of the capital structure reveals that private
mills alone had a favourable financial leverage. Further it may be
concluded that the private mill maintained a reasonable level of
debt-equity proportion but the Govt. and coop. mills had an excess dose
of debt. Moreover they have relied more on current liabilities for
financing long-term needs, which created an extra burden of interest and
risk |
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