Profitability Trend Analysis - An Empirical Study on the FMCG Sector of India
Published: 2022
Author(s) Name: Somnath Das |
Author(s) Affiliation: Kabi Sukanta Mahavidyalaya, Bhadreswar, Hooghly, Under the Univ. of Burdwan, West Bengal, India.
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Abstract
In this research paper, the author attempted to measure the profitability as well as financial performance of the FMCG sector
of India for a period from 2004 to 2018, considering seven FMCG companies listed on BSE and NSE in India. To judge the
financial performance of the companies with the help of profitability trend analysis is one of the modern concepts of performance
measurement. In this research paper, five profitability ratios such as return on net worth, earnings per share, dividend per share,
dividend pay-out ratio, and return on capital employed for 15 years have been collected and found out composite ratios by using
‘paid up capital’ as weight and obtained the weighted mean of these ratios. Mann–Kendall test has been applied to test the trend
of profitability of the selected ratios. After analysis, it has been noticed that there is a significant trend in the profitability ratios. In
all the cases, a positive trend has been noticed. Therefore, we can say that the investor can invest their fund in these companies
considering the COVID-19 situation also.
Keywords: FMCG Companies, Composite RONW, EPS, DPS, DPR and ROCE Ratios, Trend Analysis, Mann–Kendall Test, Profitability Ratios
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