Analysis Of Sustainable Peformance Using Key Financial And Non - Financial Indicators In Indian Textile Industry

Abstract

Investors generally stay away from Companies which has reported less than zero return on Equity because they perceive that companies have excess debt and significant operating losses. Du-Pont Analysis is the powerful tools of financial analysis. It studies the changes in returns and helps to examine the drivers of performance of companies. ROE is the measure of the rate of return to shareholders, higher the ROE a company renders better Operating Efficiency, better Asset Management efficiencies or employ’s high debt. The Ultimate purpose is to determine what causes the measures to fluctuate so that management can address the problems. The paper examines the drivers of ROE and studies the Net profit Margin, Asset Turnover and Equity Multiplier of 20 textiles companies listed in the NSE for the period 2010 to 2020 in India and finds the causes for changes in ROE through regression analysis.