Published Online:October 2025
Product Name:The IUP Journal of Accounting Research & Audit Practices
Product Type:Article
Product Code:IJARAP021025
DOI:10.71329/IUPJARAP/2025.24.4.33-51
Author Name:Neha Sarin and Preeti Sharma
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:33-51
The paper investigates the impact of capital structure and dividend policy on the financial performance of leading logistics firms in India. Drawing on a balanced panel dataset covering 50 firms over the period 2013-2023, the analysis uses secondary data sourced from the Prowess Database. Capital structure is measured using leverage (LEV) and shareholders’ equity (SE), while dividend policy is represented by the dividend payout ratio (DPR) and earnings per share (EPS). Return on assets (ROA) and Return on equity (ROE) serve as proxies for financial performance. Employing panel data regression models, the study applies both fixed and random effects estimations, guided by the Hausman test for model selection. The findings indicate that LEV and DPR exert a significant negative impact on ROA, while EPS positively influences asset-based profitability, underscoring the importance of efficient asset utilization. In contrast, LEV and SE show a positive and significant effect on ROE, whereas DPR and EPS remain insignificant for ROE. Overall, the results highlight the tradeoff between debt-driven shareholder returns and asset efficiency, emphasizing the need for an optimal capital structure and prudent dividend policy in logistics firms.
The logistics sector in India is a critical driver of economic growth, contributing over 14% to the GDP and supporting key industries through transportation, warehousing, and supply chain management. With the government’s focus on infrastructure modernization and digital logistics platforms under initiatives like Gati Shakti and National Logistics Policy, the financial health of logistics firms has become increasingly vital. Yet, the sector faces significant challenges related to capital intensity, asset-heavy operations, and funding volatility, making financial decision-making a core concern for sustainable performance.