CAPITAL STRUCTURE OPTIMIZATION IN MANUFACTURING FIRMS AT ASIAN PAINTS

Abstract

Capital structure has a significant impact on corporate finance because it determines the proportion of debt and equity that a company uses to fund its operations and expansion. Businesses that optimize their capital structure can lower their total cost of capital while increasing shareholder wealth. This investigation evaluates Asian Paints, a well-known Indian paint manufacturer, to assess its capital structure strategies and options. The investigation looks into the company's historical financial performance, leverage ratios, cost of capital, and the effect of the debt-to-equity ratio on profitability and risk. By examining the impact of various funding sources on financial stability, the research demonstrates how Asian Paints strikes the right balance between risk and return. The findings show that a well-structured capital mix can help manufacturing businesses achieve long-term financial sustainability, improve operational effectiveness, and maintain growth.