FINANCIAL PERFORMANCE OF SELECT FMCG COMPANIES USING ‘Z’ SCORE MODEL

Dr.M.DHANABHAKYAM; A.SAROJA

Volume : VI, Issue : VIII, August - 2016

FINANCIAL PERFORMANCE OF SELECT FMCG COMPANIES USING ‘Z’ SCORE MODEL

Dr. M. Dhanabhakyam, A. Saroja

Abstract :

The Fast Moving Consumer Goods (FMCG) sector is one of the booming sectors of the Indian economy. This sector has experienced an outstanding growth in the past decade. FMCGs sector is an important contributor to India’s Gross Domestic Product (GDP) and is also the fourth largest sector in the Indian economy, responsible for providing employment for more than three million people in downstream activities which are generally carried out in smaller towns and also in rural India. Financial performance analysis is a tool to estimate the financial position and also the strength and weakness of the company‘s management. These analysis are useful to increase the credibility of the company. The objective of this study is to analyse the performance of FMCG companies in India and predict the solvency of selected companies using Altman’s z score model which is based on Discriminant analysis. The study also purports to identify significant variables affecting the solvency of the company. Financial indicators like working capital, retained earnings, EBIT and total assets would be used. The identification of performance and distress indicators of the companies is expected to provide new insight into company analysis. Financial ratios are proposed to be used as variables.