Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in India
The present paper investigates the impact of operating efficiency on firm valuation for two economic sectors FMCG and Pharmaceutical Sectors in India. The study considers 30 Indian firms from the period of 2005 to 2015. To examine the effect, six financial ratios are considered as proxy for operati...
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| Format: | Article |
| Language: | English |
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EconJournals
2017-06-01
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| Series: | International Journal of Economics and Financial Issues |
| Online Access: | https://www.econjournals.com/index.php/ijefi/article/view/4400 |
| _version_ | 1797918388960362496 |
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| author | Pritpal Singh Bhullar |
| author_facet | Pritpal Singh Bhullar |
| author_sort | Pritpal Singh Bhullar |
| collection | DOAJ |
| description |
The present paper investigates the impact of operating efficiency on firm valuation for two economic sectors FMCG and Pharmaceutical Sectors in India. The study considers 30 Indian firms from the period of 2005 to 2015. To examine the effect, six financial ratios are considered as proxy for operating efficiency and enterprise value as proxy for Firm value. We employ Panel data analysis to explore the relationship of dependent and independent variable. The results report that Fixed Asset Turnover Ratio (FATO) and Net Profit Margin (NPM) indicates negative relation with Enterprise Value (EV) in Pharmaceutical sector and EV/Sales and Fixed Asset Turnover Ratio (FATO) confirms negative relation with EV for FMCG Sector. The empirical results will act as guidelines for the valuation analysts for implication of new valuation variables by replacing conventional variables. Moreover, the study implies that value creation is more significant to current performance as compared to past performance.
Keywords: Operating efficiency, Panel Data, Enterprise value, FMCG and Pharmaceutical Sector
JEL Classification: G32, M41
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| first_indexed | 2024-04-10T13:28:31Z |
| format | Article |
| id | doaj.art-eab64773920049a9aec851f146a5d467 |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T13:28:31Z |
| publishDate | 2017-06-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-eab64773920049a9aec851f146a5d4672023-02-15T16:11:46ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382017-06-0173Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in IndiaPritpal Singh Bhullar0Dr. Pritpal Singh Bhullar Assistant Professor, Department of Humanities & Management Studies Giani Zail Singh Campus College of Engineering & Technology (Constituent College of Maharaja Ranjit Singh Punjab Technical University, Bathinda) The present paper investigates the impact of operating efficiency on firm valuation for two economic sectors FMCG and Pharmaceutical Sectors in India. The study considers 30 Indian firms from the period of 2005 to 2015. To examine the effect, six financial ratios are considered as proxy for operating efficiency and enterprise value as proxy for Firm value. We employ Panel data analysis to explore the relationship of dependent and independent variable. The results report that Fixed Asset Turnover Ratio (FATO) and Net Profit Margin (NPM) indicates negative relation with Enterprise Value (EV) in Pharmaceutical sector and EV/Sales and Fixed Asset Turnover Ratio (FATO) confirms negative relation with EV for FMCG Sector. The empirical results will act as guidelines for the valuation analysts for implication of new valuation variables by replacing conventional variables. Moreover, the study implies that value creation is more significant to current performance as compared to past performance. Keywords: Operating efficiency, Panel Data, Enterprise value, FMCG and Pharmaceutical Sector JEL Classification: G32, M41 https://www.econjournals.com/index.php/ijefi/article/view/4400 |
| spellingShingle | Pritpal Singh Bhullar Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in India International Journal of Economics and Financial Issues |
| title | Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in India |
| title_full | Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in India |
| title_fullStr | Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in India |
| title_full_unstemmed | Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in India |
| title_short | Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in India |
| title_sort | empirical analysis of operating efficiency and firm value a study of fast moving consumer goods and pharmaceutical sector in india |
| url | https://www.econjournals.com/index.php/ijefi/article/view/4400 |
| work_keys_str_mv | AT pritpalsinghbhullar empiricalanalysisofoperatingefficiencyandfirmvalueastudyoffastmovingconsumergoodsandpharmaceuticalsectorinindia |