Title: AN EMPIRICAL ANALYSIS ON THE ASSOCIATION BETWEEN SELECTED INDIAN FMCG COMPANIES’ FINANCIAL RATIOS AND PROFITABILITY TRENDS
Author: Yogita Yadav and Dr. Praveen Dhiman
Abstract:
India’s fast moving consumer goods sector is expanding rapidly and contributes significantly to the nation’s economy. The fourth largest sector in India is the FMCG sector and play a significant role in Country’s GDP growth. One of the most important sectors in India and the world today is FMCG sector, creating millions of jobs and generating huge revenue. India’s FMCG market was valued at $179.94 billion in 2022 and it is predicted to grow at a CAGR of 27.9% between 2023 and 2029. The study mainly focuses on examining the profit trends of top five Fast Moving Consumer Goods companies listed at BSE, analysing key profitability ratios and trends using historical data, company reports, and financial statements. The statistics from 2018-2019 to 2023-2024 were examined employing trend analysis and Pearson correlation coefficient. This study analysis the profitability performance of FMCG companies which is important for both investors (to make smart investment decisions considering the company’s financial condition and potential for future development) and businesses (to ensure long-term sustainability and growth). The current study employed trend analysis technique which uses recently observed trend data to forecast future financial performance which helps the companies to make informed decisions to improve profitability and for the long-term planning. This study helps the companies to assess their profitability performance which is useful for making long- term strategic plans. The finding indicated that the profitability of FMCG companies fluctuated throughout the six-years from 2018-2019 to 2023- 2024, with a peak in 2020 and 2023 but decline in 2024 due to increasing operating expenses and inefficient capital utilisation. This suggests that the companies should improve cost control, optimal utilization of resources and focus on sales growth to sustain profitability in long run. The Pearson correlation coefficient Matrix shows that the strongest relationship exists between ROA and ROCE (0.860, p<0.01) indicates that companies with higher ROA tends to have a higher ROCE and making ROA a strong predictor of ROCE.
Keywords: FMCG companies; Pearson correlation coefficient, trend analysis
DOI: https://doi.org/10.38193/IJRCMS.2025.7339
PDF Download
Date of Publication: 28-06-2025
Download Publication Certificate: PDF
Published Vol & Issue: Volume 7 Issue 3 May-June 2025