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... The obvious factors are: the nature of its product or service offered, supply and demand, market structure and the competitive environment. ... Having said that, it・s also the case that the lesser one spends on capital assets, greater are the chances of success. ... Project A gives you a 20 per cent return on capital employed, while Project B promises 15 per cent. Assume your cost of capital is around 10 per cent. ... While leverage is an inevitable fact of life for enormous capital-guzzling projects, the extent of leverage and the manner in which it is structured can make the difference. ... The answer lies in their capital structure. ... The company・s equity capital has been on a climb ever since. From Rs 419 crore in March 1994, Reliance Petroleum・s capital has swelled to Rs 4,749 crore, thanks to frequent conversion of warrants into equity shares. ... Earlier (pre-March 1998), refining companies were paid a post-tax assured return of 12 per cent on return on capital employed by the government. Besides, there are other factors that are equally critical in determining profitability. ... This ensured the company steady cash-flow to meet its interest commitments, while at the same time, deliver a creditable 20 per cent return on capital employed. ... Purnendu Chatterjee of The Chatterjee Group, which holds 43 per cent stake in the Rs 1,010-crore capital of Haldia Petrochemicals, wants to recast the ratio by converting the exposure of financial institutions of over Rs 3,500 crore (total debt is Rs 4,100 crore) into quasi-equity.
Approximate Word count = 1130
Approximate Pages = 4.5
(250 words per page double spaced)
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