The purpose of this paper is to evaluate the asset tangibility, capital structure and their impacts on financial performance. 11 oil and gas companies encompassing three refinery companies and eight drilling and exploration companies listed on Bombay Stock Exchange (BSE) constituted the research sample. The required data for analysis of financial performance of select companies were collected from the annual reports and financial statements of the firms covering a period of ten years from 2007. This paper uses EPS and fixed asset as proxies for financial performance and asset tangibility respectively. This study employs descriptive statistics, Pearson correlation and linear regression analysis.  Results presented in this study show that there is a positive and significant relationship between capital structure and financial performance. However, the relationship between asset tangibility and financial performance is significant and negative.

KEYWORDS: Asset tangibility, capital structure, financial performance, oil companies, India.