Financial Performance Analysis: A Study on Selected Pharmaceutical Companies in India

Abstract

In terms of output, value, quantity, and units, the Indian pharmaceutical business is quickly developing, and two primary trends appear to be aligned with the overall growth of the Indian economy. Second, India's underlying pharmaceutical business system has undergone tremendous upheaval. The purpose of this study is to identify and investigate aspects, such as financial ratios, that have a major impact on the profitability of the organisations under consideration. Ten Indian pharmaceutical companies have been chosen for this. The current study is based on secondary sources, and data from 2009-10 to 2018-19 was analyzed using factor analysis and multiple regression analysis. According to the results of factor analysis, there are 10 important factors out of 36 variables, such as profitability margin factor, liquidity and solvency factor, asset management factor, portfolio management factor, and so on, that explain approximately 77 percent of the variation in the original data set. Furthermore, the results of the multiple regression analysis demonstrate that the profitability management factor, asset management factor, portfolio management factor, and asset turnover factor all have a substantial impact on the profitability of the Indian pharmaceutical companies studied.