Abstract
The main aim of this article is to examine the effect of firms’ specific on the financial performance of Indian firms. The study is based on 1069 firms listed on the Bombay stock exchange for the period from 2011 to 2017. Descriptive statistics, correlation matrix, and regression models are used for analyzing the data. The study found that cost of financial distress, growth opportunities, firms size, and total taxes positively and significantly impact the financial performance of Indian firms measured by return on assets and return on capital employed. On the contrary, asset structure and leverage negatively and significantly impact the financial performance of Indian firms. Most previous studies were based on small samples; this article bridges an existing gap in the literature by covering large data of1069 firms for seven years which make the results of the study to be generalized. The findings of this study have useful implications for policymakers, practitioners, and academicians.
Highlights
Most organizations have started their businesses in order to earn profit and provide their shareholders with sufficient income in exchange
The study found that cost of financial distress, growth opportunities, firms size, and total taxes positively and significantly impact the financial performance of Indian firms measured by return on assets and return on capital employed
The target population of the study is all non-financial firms listed on Bombay stock exchange, there are almost 4056 non-financial firms listed on Bombay stock exchange
Summary
Most organizations have started their businesses in order to earn profit and provide their shareholders with sufficient income in exchange. )Devi A & Devi S, 2014) Advocate that profitability helps companies to improve their market climate by enhancing negative shocks and investing in improving them. It was possible to determine the importance of corporate profitability at 2 stages, that is, macro and micro of the financial sector. Cost-effective and profitable market environments are strengthened and continue to improve the business climate. For this reason, studies in the fields of economics, corporate strategy, accounting, marketing and finance have found the assessment of the variables influencing firm profitability and the identification of sources of differentiation in company-level profitability as core research topics (Jonsson, 2007; Nunes, 2009; Gaur & Gupta, 2011)
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