Capital structure refers to the way a corporation finances its assets through some combination of 1. equity 2. debt 3.

hybrid securities Capital structure is most likely used for referring acompanys debt equity ratio. A high debt/equity ratiogenerally means that a company has been aggressive in financing its growth with debt Capital structure is most likely used for referring acompanys debt equity ratio. A high debt/equity ratiogenerally means that a company has been aggressive in financing its growth with debt. Levered CompanyA company that uses borrowed money to help finance its assets. Leveraged companies often have more volatile earnings than firms that rely solely on equity financing. Mostly companies having huge capital investment will for levered company. The cost of capital is less compared to unleveled company as they dont have to share the profit with theshareholders.shareholders expects a high return as a risk premium. An eg-Manufacturing company raises money for buying machineries. Unleveled companyA company that takes money from public to raise their capital. Unleveled company cost of capital is high and in this case profit has to be shared and the return will be volatile to the lenders i.e. the shareholders .whereas in levered company the rate of interest will be fixed as decided with the lender. Generally a unleveled company has less of capital investment For eg-most of the IT sector companies are unleveled as this business does not involve purchase of machinery it is service oriented industry

Debt equity ratioA measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets. Total Liabilities Shareholders Equity Cost of capitalThe cost of capital is the rate of return that capital could be expected to earn in an alternative investment of equivalent risk.

Equity and Debt analysis Equity:(Rs.in Crore)

Year Equity Mar-07 17.3 Mar-08 17.98 Mar-09 17.98 Mar-10 80.44 Mar-11 80.44

Euy qi t 9 0 8 0 7 0 6 0 5 0 4 0 3 0 2 0 1 0 0 20 07 20 08 20 09 21 00 21 01 Euy qi t

The equity of 2007, 2008, and 2009 are as same and then after they have issued new fresh share in 2010 and 2011 year.

Debt:(Rs.in Crore)
Year Debt Mar-07 505.37 Mar-08 732.3
Eiy q u t 10 0 0 9 0 0 8 0 0 7 0 0 6 0 0 5 0 0 4 0 0 3 0 0 2 0 0 1 0 0 0 27 0 0 28 0 0 29 0 0 20 0 1 21 0 1 Eiy q u t

Mar-09 911.5

Mar-10 570.56

Mar-11 577.34

As we can easily seen that company can increase that debt in 2007, 2008 and 2009 then after company reduce its debt. Inspite of they piramal has increasing there debt from last 3 years, Piramal Glass is been doing considerable investment in assets which can seen in the below graph.

Total Assets:Year Total Assets Mar-07 756.13 Mar-08 996.01

Tt lAs t o se a s 10 20 10 00 80 0 60 0 40 0 20 0 0 20 07 20 08 20 09 21 00 21 01 Tt lAs t o se a s

Mar-09 1120.86

Mar-10 971.94

Mar-11 1014.58

The investment in asset is not done through raising the capital it means it issuing its reserve for purchase of new assets or investment, use of internal reserve reduces the burden of paying interest as against loan.

Capital structure of Piramal Glass:Equity Debt 12.23 87.77

Debt Equity Ratio-2011

Equity 12%

Debt 88%

Piramal Glass Ltd has raised more of debt than equity issue its a levered company.