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ABSTRACT
The primary objective of the present investigation is intended to find the determinants of profitability of listed companies of Fast Moving Consumer Goods (FMCG) on Bombay Stock Exchange (BSE). To reach out the predefined objective, the relationship between independent factors and the dependent factor of listed companies on BSE-FMCG is analyzed. Financial ratios of sixty-seven listed companies from moneycontrol.com database has been collected and analyzed for the purpose for the period 2012-2016. The database is universally acceptable and is reliable as it is the main source of many institutional and individual investors for their investment decisions. To accomplish the stated objectives of the study, discrete statistics, the coefficient of correlation and regression analysis is done and inference on the same has been interpreted. The results reveal that profitability is positively significant in inventory turnover ratio and negatively significant with debt equity ratio and asset turnover ratio. On contrary, the size, liquidity, retained earnings ratio and capital intensity ratio factors found to have a negative and insignificant relationship with profitability. The determinants of profitability play very vital role at firm level as well as industry level. For stock exchange also it is connected directly to maintain the economic development through increase the value of investor's portfolio, improve the industrialization policy and exportation etc. The profitability plays a vital role in terms of increasing the long-term returns, boost the income of employees, better quality of products, eco-friendly environment, generate more employment opportunities and tend to enhance the future investments.
JEL Classification: G17; G23.
Keywords: Profitability; Liquidity; Capital Intensity Ratio; Debt Equity Ratio; Asset Turnover Ratio.
(ProQuest: ... denotes formulae omitted.)
1. INTRODUCTION
The performance of any industry is usually evaluated by its profitability. Profitability of an industry would be reaction several micro and macro variables of an economy where industry is consist of. Profitability is a financial result, which refers the revenues gained from a firm exceeds the expenses in a given period of time. To measure the profitability at firms' level, various profitability ratios are used at different cost levels. For naming a few, gross ratio, net profit ratio, operating ratio, profit before tax ratio etc. These ratios even include taxes paid, operating and non-operating expenses, cost of goods sold etc. It is known...