Financial Performance of Paper and Paper Product Companies in India in Post-Liberalization Period: An Exploratory Study

Abstract

This paper analyses the financial performance of Indian paper and paper product companies using data from CMIE over the period, 2000-01 to 2008-09.The analysis has been conducted from seven key financial dimensions, namely, financial profitability, capital structure, operational efficiency, fixed asset age, current asset efficiency and liquidity position. .The financial performance analysis identifies financial strength and weakness of the firms within paper industry. The study suggests that liquidity position and profitability of the industry as a whole are sound and strong ensuring good liquidity management and better profitability to both investors as well as entrepreneurs. The study reveals that high and gradually increasing current asset turnover has been a contributing factor responsible for ensuring current asset efficiency which means that resources like current assets of the firms of the industry are getting utilized more efficiently. But, dividend payment being lower, the companies need to improve the quantum of dividend payment in order to satisfy the investors without affecting the future expansion and modernization programmes of the sector. Moreover, companies should make a concerted effort in maximizing assets and minimizing liabilities so that overall financial position could be improved.

Key words: Paper, industry, financial performance, multiple regression, India.