IMPACT OF CAPITAL BUDGETING DECISION ON PROFITABILITY OF SELECTED LEATHER COMPANIES IN TIRUPATTUR DISTRICT TAMIL NADU.
Abstract
Purpose: Profitability is a key component of corporate operations and establishes the benchmark for valuing a company. The goal of the study was to find out how capital budgeting choices affected leather companies' bottom lines. The study specifically focused on five areas where capital budgeting decisions the purchase of long-term assets, their replacement, investment appraisal methods, outsourcing expenses, and working capital decisions had the greatest and most notable impact on the profitability of the organizations. Methodology: In essence, this study entailed a survey of Tirupattur district's leather businesses in Tamil Nadu. Shareholders would view as reckless any company that attempts to commit its resources to a project without fully appreciating the risks and rewards involved. Ten leather industries in Tirupattur, Tamil Nadu, were included in this study. The paired T test and correlation were applied. Findings: In essence, this study entailed a survey of Tirupattur district's leather companies in Tamil Nadu. The results established a relationship between profitability and the independent factors of capital budgeting decisions. The study looked at how leather industries profitability was affected by capital budgeting. Profitability and capital budgeting were the study's independent factors. Research implications: It is clear from the high t-values (12.37 and 11.26), p = 0.00, that Farida shoe and Farida shoes' created positive and statistically significant values for this study. The least significant but still low results were obtained for DELTA SSHOES Leather (t=2.11, p = 0.07). Originality/Outcome: The study found that positive impact of capital budgeting on profitability of the firms under the study.
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