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Performance Analysis of FMCG Sector in India


Affiliations
1 Department of Management Studies, I.K. Gujral Punjab Technical University, Kapurthala, Jalandhar, Punjab, India
2 GGSD College, Chandigarh, India
3 Rayat Institute of Management, Chandigarh, India
     

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For the performance analysis of Fast Moving Consumer Goods (FMCG) industry, discriminatory power of financial ratios are examined by using Wilks’ lambda and Multiple discriminant function analysis. For this purpose sample of eighteen FMCG companies listed with Bombay Stock Exchange is taken in to account. Market capitalization is taken as basis for selecting these companies. Data is collected for twelve years ranges from 1 April 2006 to 31 March 2017. For effective implementation of discriminant analysis, firstly average stock market returns are computed from the annual stock prices of the selected companies and average stock market returns are classified in to three groups viz. ‘Market Under-Performers’, ‘Market Average-Performers’ and ‘Market Out-Performers’. It has been found that revenue from operations/share is the most important ratio and having impact to assess the company’s market performance. Debt equity ratio and inventory turnover ratio having moderate impact in assessing the company’s stock market performance of companies and dividend payout ratio is the ratio having less impact in assessing the company’s stock market performance.

Keywords

Multiple Discriminant Analysis, FMCG, Average Stock Market Return, Financial Ratios.
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  • Performance Analysis of FMCG Sector in India

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Authors

Rosy Dhingra
Department of Management Studies, I.K. Gujral Punjab Technical University, Kapurthala, Jalandhar, Punjab, India
Kapil Dev
GGSD College, Chandigarh, India
Madhuri Gupta
Rayat Institute of Management, Chandigarh, India

Abstract


For the performance analysis of Fast Moving Consumer Goods (FMCG) industry, discriminatory power of financial ratios are examined by using Wilks’ lambda and Multiple discriminant function analysis. For this purpose sample of eighteen FMCG companies listed with Bombay Stock Exchange is taken in to account. Market capitalization is taken as basis for selecting these companies. Data is collected for twelve years ranges from 1 April 2006 to 31 March 2017. For effective implementation of discriminant analysis, firstly average stock market returns are computed from the annual stock prices of the selected companies and average stock market returns are classified in to three groups viz. ‘Market Under-Performers’, ‘Market Average-Performers’ and ‘Market Out-Performers’. It has been found that revenue from operations/share is the most important ratio and having impact to assess the company’s market performance. Debt equity ratio and inventory turnover ratio having moderate impact in assessing the company’s stock market performance of companies and dividend payout ratio is the ratio having less impact in assessing the company’s stock market performance.

Keywords


Multiple Discriminant Analysis, FMCG, Average Stock Market Return, Financial Ratios.

References