An Empirical Analysis of the Impact of Capital Structure on the Financial Performance of Infosys Limited

Abstract

This paper investigates the connection between financing choices and profitability outcomes at Infosys Limited using data from 2015 to 2024. We collected secondary financial information from annual statements and dedicated databases, employing the debt-to-equity ratio (DER) as our primary independent variable while measuring performance through return on assets (ROA) and return on equity (ROE). Our calculations show Infosys follows a highly cautious financing path, with DER figures staying beneath 0.10 across all ten examined years. Correlation testing reveals inverse relationships between DER and both profitability indicators, implying that the firm's low-debt approach coincides with better financial results. We conclude that Infosys's financing patterns support predictions made by the Pecking Order framework, providing useful takeaways for company decisionmakers and those investing in equity markets.