Profitability Performance of Select Automobile Units in India
Keywords:
Automobile, vertical integration, leverage, liquidityAbstract
The automobile industry of India is one of the largest market compared to the world market. India is a home to 40 million passenger vehicles proving that the automobile industry has been able to provide the suitable match of vehicle for this large population of India. This paper focused on the profitability performance with special reference to profitability ratios of select automobile units in India. For the purpose of the study, the researcher has conveniently selected top six companies having highest sales and production in 2018. Profitability is the ability to earn profit from all the activities of an enterprise. It indicates how well management of an enterprise generates earnings by using the resources at its disposal. A business needs profits not only for its existence but also for expansion and diversification. Vertical integration, leverage, liquidity, inventory turnover and operating expenses to sales ratio are also the strongest determinants of the profitability of an enterprise.
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