Ratio Analysis

Topics: Financial ratios, Financial ratio, Financial statements Pages: 35 (5690 words) Published: March 28, 2013
Though there are innumerable literatures available on the subject, the most appropriate studies have been reviewed.Dr. Promod Kumar published a book in 1991 “Analysis of financial statement of Indian Industries” The study covered the 17 private sector, 5 state owned public sector and 1 central public sector companies. He studied analysis of activities, assessment of profitability, return on capital investment, analysis of financial structure, analysis of fixed assets and working capital. In his research he revealed various problems of industries and suggested remedies for the problems. He also suggested for the improvement of profitability and techniques of cost control.1Ahindra Chakrabati published an articles “Performance of public sector enterprises a Case study on fertilizers” in “The Indian journal of public enterprise” in the year 1988-89. He made analysis of consumption and production of fertilizer by public sector; he also made analysis of profit and loss statement. He gave suggestion to improve the overall performance of public enterprise.2 In the year of 2002, Dr. Sugan C. Jain has written a book on “Performance appraisal automobile industry” In his study he has analyses the performance of the automobile industry and presented comparative study of some national and international units. The operational efficiency and profitability had been analyzed using the composite index approach. He made several suggestions from the strengthening the financial soundness improving profitability, working capital the performance of fixed assets.3 Recently in the year 1998 a study was made by S.J.parmar on “Financial Efficiency-Modern methods, tools & Techniques” for the period from 1998-89 to 1994-95.He had made an attempt to analyze financial strength, liquidity, profitability, cost and sales trend and social welfare trend by using various ratios analysis, common size analysis and value added analysis. He made several suggestions for the improvement of profitability of industry. In his analysis, he indicates various reasons for higher cost, low profitability, and inefficient use of internal resources.4Dr Sanjay Bhayani published a book in 2003, “Practical financial statement analysis” The study covered 16 public limited cement companies in private sector. He made study of analysis of profitability, working capital, capital structure and activity of Indian cement industry. In his research he revealed various problems of cement industries and suggested remedies for the problems. He also suggested for the improvement of profitability and techniques of cost control.5Ram Kumar,Kakani Biswatosh saha and V.N.Reddy has written research paper on Determinants of Financial Performance of Indian Corporate Sector in the Post-Liberalization Era: An Exploratory Study. This paper attempts to provide an empirical validation of the widely held existing theories on the determinants of firm performance in the Indian context. The study uses financial statement and capital market data of 566 large Indian firms over a time frame of eight years divided into two sub-periods (viz., 1992-96, and 1996-2000) to study Indian firms' financial performance across various dimensions viz., shareholder value, accounting profitability and its components, growth and risk of the sample firms. It reveals that even on the same data, the determinants of market-based performance measures and accounting-based performance measures differ due to influence of 'Capital Market Conditions'. We found that size, marketing expenditure, and international diversification had a positive relation with a firm's market valuation. Apart from these firm attributes that reflect either operating parameters of firms or 'strategic choice' of firm managers, we also found that a firm's ownership composition, particularly the level of equity ownership by Domestic Financial Institutions and Dispersed Public Shareholders, and the leverage of the firm were important factors affecting its...

References: 1. Dr. Promod Kumar.: “Analysis of financial statement of Indian Industries”Saujaniya Publication Ltd. 1992
9. Review of Business Research, 2007 by Tarun K.Mukherjee, Prakash Deo.
12. Kulshreshtha, N.K., “Analysis of Financial statements of Indian Paper industry”, Aligarh: Navman Publishing House, 1972, p.133.
14. Hunt W. and Donaldson, G., “Business Finance-text and cases”, Illinois: Richard D.Irwin, 1965, Pp.114-115.
15. Roy Chowdhar, A.B., “Analysis and Interpretation of Financial statements”, New Delhi Orient Longmans, 1970, p.24.
16. Bogen, J.J., “Financial Handbook” New Delhi: The Ronald press, 1957,p.253.
18. Hingorani, N.L.and Raman than, A.R., “Management Accounting”, New Delhi: Sultan Chand & Sons, 1977,p.115.
19. Srivastava, R.M., “Financial Management”, Meerut India: Pragati Prakasjan, 1979, p.476.
22. Mohsin, M., “Financial Planning and Control”; NewDelhi: Vikas publishing House Pvt. Ltd., 1980, p.174.
24. HENDERSON, G.V., Gurry, J.R.Trnnep Oh., James E. Wirt., “An Introduction to financial Management”, California: Addition-Wesley publishing company, 1984, p.122.
Originality = 175.00, importance = 162.50, overall quality = 162.50
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