Determinants of Profitability of Automobile Industry in India

Abstract

The present study is an attempt to ascertain the determinants of profitability of automobile industry in India by taking a sample of all the automobile firms covering various segments of automobile industry in India viz. commercial vehicles, three wheelers, two wheelers, and passenger vehicles which are listed on Bombay Stock Exchange (BSE), for a period of eleven years from 2003-04 to 2013-14. In order to achieve the objectives of the study, firm-specific factors viz. financial leverage, size of firm, tangibility of assets, growth of firm, liquidity, inventory turnover ratio, debt equity ratio, debtors turnover ratio, total assets turnover ratio, average payment period, and cash liquidity of firm are regressed against return on assets ratio. Firstly correlation analysis and multiple regression analysis are applied to identify the factors affecting profitability of sample firms. Further, to find out the prominent factors that account for the variation in profitability of sample firms, step-wise regression analysis has been carried out. It was found that profitability of automobile industry in India is significantly influenced by the liquidity position of firm, growth of firm, inventory turnover ratio, debt equity ratio, and average payment period.

Macroeconomic Determinants of Automobile Sales in Indonesia: An Empirical Study in 1986-2016

“…Meanwhile, Kaur and Kaur (2016) attempted to ascertain the determinants of profitability of automobile industry in India. It was done by taking a sample of all the automobile firms covering various segments of the automobile industry in India listed on Bombay Stock Exchange (BSE), for eleven years from 2003-04 to 2013-14.…”

Pengaruh Likuiditas, Solvabilitas, Firm Size, Dan Firm Growth Terhadap Profitabilitas

“…Dengan menggunakan hutang dengan tepat dan efisien, akan meningkatkan profitabilitas perusahaan. Pada penelitian yang dilakukan oleh Bhayani, 2010;Janjua et al, 2016;Jaworski & Czerwonka, 2016;Nanda & Panda, 2018dan Nugraha & Haryanto, 2016 menunjukan hasil likuiditas berpengaruh positif dan signifikan terhadap profitabilitas, Fransisca & Widjaja, 2019 menemukan hasil likuiditas berpengaruh negatif terhadap ptofitabilitas, sedangkan Alarussi & Alhaderi, 2018;Anissa, 2019;Kaur & Kaur, 2016;Latha & Rao, 2017;Novyanny & Turangan, 2019 dalam penelitiannya menunjukan likuiditas berpengaruh tidak signifikan terhadap profitabilitas.…”

“…Rasio likuiditas mengukur kemampuan suatu perusahaan untuk memenuhi kewajibannya dengan memanfaatkan aset likuid yang tersedia, jadi memperhatikan kecukupan likuiditas merupakan indikator yang positif untuk kesehatan keuangan perusahaan (Latha & Rao, 2017). Dalam penelitiannya, Bhayani, 2010;Kartikasari & Merianti, 2016dan Pangestu, 2018 menjelaskan bahwa solvabilitas memiliki pengaruh positif dan signifikan terhadap profitabilitas, Gharaibeh & Khaled, 2020;Liang & Natsir, 2019;Pervan & Mlikota, 2013;Alarussi & Alhaderi, 2018;Fareed et al, 2017;Fransisca & Widjaja, 2019;Jaworski & Czerwonka, 2016;Kaur & Kaur, 2016;Latha & Rao, 2017;Nanda & Panda, 2018dan Putra & Badjra, 2015 dalam penelitiannya menemukan solvabilitas memiliki pengaruh negatif signifikan terhadap profitabilitas, tetapi hal ini bertolak belakang dengan penelitian Anggarsari & Aji, 2018;Gunawan, 2020dan Arifin & Indrayang, 2015 yang menemukan hasil solvabilitas memiliki pengaruh tidak signifikan terhadap profitabilitas.…”

Exploring the Link between Operational Efficiency and Firms’ Financial Performance: An Empirical Evidence from the Ghana Stock Exchange GSE

“…Further, Navleen and Jasmindeep (2016) examined the profitability determinants of the Indian automobile industry for the period 2003-2004 to 2013-2014. Data from listed firms on the Bombay Stock Exchange (BSE) dealing in commercial vehicles, three wheelers, two wheelers and passenger vehicles were used for the study.…”

“…Specifically, the study sought to determine the association between operational efficiency and the firms' financial performance as measured by ROA; examine the connection between operational efficiency and the firms' financial performance as measured by ROE; and to find out the affiliation between operational efficiency and the firms' financial performance as measured by ROCE. Panel data sourced from the audited and published annual reports of fifteen(15) listed nonfinancial firms for the period 2008 to 2017 was used for the study. From the study's Pearson Product-Moment Correlation Coefficient technique of data analysis, operational efficiency had a significantly negative association with the firms' financial performance as measured by ROA [r= -0.2981, (p=0.0002)<0.05].…”