REGRESSION AND INDUSTRY ANALYSIS OF FACTORS AFFECTING CAPITAL STRUCTURE

Abstract

This project aims to analyze how risk profiles and different industries impact the capital structure, for this we have analyzed four companies in total. Two companies the from automobile industry and two companies from the software industry. We want to find whether being in an asset driven industry has an impact on the capital structure vs an industry which is human resource driven for that we have chosen software industries company. At the same time, to analyze whether Risk profiles has an impact on the Capital Structure, for that we have taken up 2 companies in the electric space. To have comparability in the data, we have selected public companies which are listed in the US stock market with the year-end closing on December 31, 2021. We have collected the data from the U.S. Securities and Exchange Commission(SEC) website. For each company we have utilized their Annual Year End Filing (10-K). We have analyzed top 20 US companies in terms of market capitalization, and then using regression we would be observing whether factors like Gross Margin, Return on Asset and Return on Equity have an effect on the capital structure of the companies. We have taken the data from the company’s annual fillings.