review of literatureshodhganga.inflibnet.ac.in/bitstream/10603/37228/4/chapter2.pdf · the sugar...

15

CHAPTER-II

REVIEW OF LITERATURE

This chapter presents the review of literature relating to the study undertaken

The collection of reviews has been made from various studies undertaken by academicians

practitioners researchers etc from time to time These reviews will enlighten the existing

knowledge of the researcher Besides this the reviews of empirical studies explore the

avenues for the present and future research related to the subject matter in order to understand

the research problem The earlier attempts made by the academicians economist socialist

etc are needed to study The review of literature guides the researchers for getting better

understanding of methodology used limitation of various available estimation procedures

databases lucid interpretation and reconciliation of conflicting results In case of conflicting

and unexpected results the researcher can take the advantage of knowledge of other

researchers simply through the medium of their published works

A large number of research studies had been carried out on different aspects of the

financial performance by the researchers economists and academicians in India and abroad

The different authors had analyzed profitability in different perspectives A review of

these analyses is important in order to develop an approach that can be employed in the

context of the study of sugar industry in Tamil Nadu Therefore the present chapter

reviews the various approaches to study the profitability analysis

Whittington (1980)1 studied the profitability and size of united kingdom companies

covering the period from 1960-1974 He found that average profitability was largely

independent of firm size The relationship between inter-companies dispersion of

profitability and variability of profits through time tended to decline with the firm size

He also found that the average profitability margin and salesassets ratio did not vary

systematically with firm size Moreover the large firms tended to be relatively stable through

time whereas their salesassets did not thus the relative stability through time of the rates of

return Due to relative stability of their profits rather then stability of the utilization

profitability was not an incentive for large firms to grow at a relatively higher rate

1 WhittingtonG (1980) ldquoThe Profitability and size of United Kingdom Companies 1960-1964rdquo The

Journal of Industrial Economics Vol 28 pp335-342

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16

Ramesh (1980)2 stated that the sugar industry in India is the second largest

processing industry in the country next only to textile There are 320 factories producing

annually 6570 lakh tonnes of sugar The aggregate assets of the industry are more than

Rs 1300 crores About 30 million cultivators are engaged in growing sugarcane and

supplying the same to sugar factories The Sugar Industry disburses about Rs 800 crores

annually towards the sugarcane price It contributes more than Rs 300 crores annually to

state and central exchequers The factories are ideally suited for faster rural socio-

economic development The prosperity of the sugar industry is therefore closely linked

with the development and prosperity of our vast population residing in the villages

Shah and Shah (1980)3 pointed out that the cost of production of sugar factory

depends primary on the raw materials the sugar recovery percentage and the duration of

crushing season They suggested that the cost of sugar production can be brought down

by utilizing the processing unit for a maximum period the proper checking of the machinery

of its day to day work the cost of extra fuel lubricants spare parts consumption of

chemicals and sugar content in final molasses would be reduced if the steam balance

and machinery maintained proper plans and proper watch in clarification and boiling

house stations

Murali (1980)4 suggested that break-even analysis is an important aspect for proper

planning of sugar industry and controlling its profits It helps in determining

Minimum level of operation required to avoid losses

Volume of sale to be undertaken to achieve a profit target

The effect of change in price change in fixed costs change in variable cost and change in

volume of sales on profit and

Assessment of the proportion and sales mix to maximize profits

Manohar Rao (1980)5 rightly pointed out that the current international prices of

sugar and molasses every sugar producing country has a strong reason to convert sugarcane

2 Ramesh NA (1980)Adjudication of the Performance of Sugar Factoriesrdquo Maharashtra Sugar 6(4)1980

pp47 3 Shah HPand Shah NK ldquoMeasures for Reduction in Cost of Production of Sugarrdquo Gujarat Association

for Agricultural Science 1980 4 Murali P (1980) ldquoSugar Industry Planning and Controlling Profilesrdquo Maharashtra Sugar 5(5)pp39


17

into sugar and molasses to earn foreign exchange required for keeping up the balance of trade

It may be even economical to import crude out of the foreign exchange earned by export of

sugar and molasses However as the international price of sugar is fluctuating widely and for

reducing the dependence on other countries for import of crude gradually for political reasons

the sugar producing countries may have to convert the molasses into alcohol and also consider

the possibilities of converting a part of the sugar juice into alcohol He further concluded that it

was more economical to convert sugarcane into sugar and molasses and to use molasses as raw

material for production of ethyl alcohol The economic of these activities will however largely

depend on the international price of these sugar molasses and ethyl alcohol

Singh (1980)6 reported that the by-products of sugar factories were neglected

continuously and income from by-products was lost The realization from the by-product

of sugar factory represents about 1 to 3 per cent of the value of sugar He suggested that

if the by-products of sugar factories (ie bagasses molasses filter mud boiler ashes and

sugarcane tops) were put to right use they could generate a new hope for the employees

The sugar technologists have pointed out that if all the by-products are utilized in a sugar

factory its probability may increase by as much as 50 per cent depending on the products

which it chooses to adopt from the by-products

Tube (1980)7 in his work on ldquoImpact of Sugar Factories on the Rural Economy ndash

A Case Studyrdquo has studied in detail the impact of Sanjivani Cooperative Sugar Factory in

Ahmed Nagar district on agriculture agriculturists on the lives of agriculture labour

economic conditions of factory workers and spread effects of the sugar factory and

overall economic change in rural area He concluded with the findings that sugarcane

being the cash crop area under sugarcane has increased the area under irrigation has

increased and likewise the change in the cropping pattern and methods of farming have

changed It is argued that the development of agriculture depends on major agro-based

industries The real income of the farmers has increased but the real income of the

agricultural laborers has been decreased It is concluded by the author that sugar factory

in rural area has worked as a growth centre

5 Manohar Rao PJ (1980) ldquoBy-Products Utilization in Sugar Industryrdquo Maharashtra Sugar 6(5) pp36

6 Singh (1980) RV ldquoWealth from Sugarcane Wasterdquo Yojana 24 (9) pp7

7 Tube SD (1980) ldquoThe Impact of Sugar Factories on the Rural Economyrdquo ndash A Case Study PhD Thesis

University of Poona


18

Kasbekar (1981)8 has observed that the sugar economy has been passing through

phases of surplus and deficit in production and consumption leading wide fluctuations in

the prices of sugar He further observed that it has affected the major indicators of sugar

industry and sugar prices

Asha Jain (1981)9 studied on ldquoPrice Cost Margin in Indian Manufacturing

Industries An Econometric Analysisrdquo analyzed the price cost margin overtime in the Indian

Manufacturing Price cost margin was used as a measure of profitability Cost factors emerged

as significant determinants of profitability while structure variables like concentration

ratio capacity utilization and growth and capital intensity showed mixed pattern results

varied among the industries

Sharma (1981)10

has stated that Co-operative sugar factories help farmers for

getting more yields by following ways

Distribution of good quality cane which is disease free and improved varieties for

planting

Land preparation to provide agricultural implements

Irrigation facilities

Technical knowledge of crop rotation inter cropping by different trails and demonstration

Hapse (1982)11

reported that the factors like inadequate supply of sugarcane due

to lack of sugarcane development programme lack of irrigation facilities lack of

regulation in sugarcane supply due to inadequate control leading to cane scramble

inadequate own funds excess burden of interest on temporary or short loan unrealistic

sugar and sugarcane prices lack of efficient management lack of expertise in the board

of directors competitions of gur and khandsari units and lack of long-term sugar policy

are the root causes for the sickness of the cooperative sugar factories in Maharashtra

8 Kasbekar (1981) SA ldquoSugar Shares on Its Way to Recoveryrdquo Economic Times Research Bureau

9 Asha Jain (1981) ldquoPrice Cost Margin in Indian Manufacturing Industries An Econometric Analysisrdquo

PhD Thesis Kanpur 10

Sharma SC (1981) ldquoThe Role of Sugar Industry in Rural Development With Special Reference to east

Uttar Pradeshrdquo Indian Sugar 31(6) pp395 11

Hapse DG (1982) ldquoSugar development Technology for Maharashtrardquo Maharashtra Sugar 8(2) pp51


19

Gangadhar (1982)12

in his study‟s examined some aspects of profitability in cement

industries He made comments on profitability of large public limited cement companies in

India In order to bring out fluctuations and to offer possible causes for such fluctuations

The study revealed that the profitability in cement industries had fluctuated very widely with

low rate during the period under review The profit margin in the cement had shown

declining trend where as the assets turn over showed an increasing trend

Bhabotosh Banerjee (1982)13

in his study on ldquoCorporate Liquidity and

Profitability in Indiardquo has identified the relationship of liquidity with profitability by

analyzing the trend of liquidity position of medium and large public limited companies in

India covering the period from 1971 to 1978 His study reveals that in industrial groups

belonging to ferrous non-ferrous metal products for shipping a raise in liquidity led to

raising profitability and vice versa however in other industry groups like tobacco silk

and rayon textiles a rise in liquidity has been found to have a decline in profitability

Kohak (1983)14

has studied the socio-economic effects of a cooperative sugar

factory on agriculture cultivators and on agricultural laborers He had chosen the Niphad

Shetkari Shakari sakhar Karkhana in Nasik district He also studied the impact of sugar

factory on the development of infrastructure social services like education medical

facilities capital formation and employment generation in the area of operation of sugar

factory From this study he concluded that because of the establishment of the sugar

factory the tendency of depending solely on the cash crop like sugarcane has been increasing

among the farmers which may ultimately have adverse effect on other farmers Secondly

sugarcane requires proportionately more water compared to other crops ie nearly for a

period between 15 and 18 months till its maturity If the available water is used for other

crops of 3 to 4 months duration more land can be brought under irrigation This will help in

increasing agricultural productivity and it is the need of the time He also concluded that a

cooperative sugar factory accelerates economic development in its area of operation only

12

Gangadhar RV (1982) ldquoFinancial Analysis of Cement Companies a Profitability and Efficiency Focusrdquo

the Management Accountant 13

Bhabotosh Banerjee (1982)ldquoCorporate Liquidity and Profitability in Indiardquo Research Bulletin July 14

Kohak and Narwadkar DS(1983)ldquoProduction Performance of Co-operative Sugar Units in

Maharasthrardquo Indian Journal of Agricultural Economics XIV (3) pp343


20

Agarwal (1983)15

also studied working capital management on the basis of

sample of 34 large manufacturing and trading public limited companies for the period

1966-67 to 1976-77 Applying the statistical techniques of ratio analysis responses to

questionnaire and interview the study concluded that the working capital per rupee of

sales showed a declining trend over the years but still there appeared a sufficient scope

for reduction in investment in almost all the segments of working capital An upward

trend in cash to current assets ratio and a downward trend in cash turnover showed the

accumulation of idle cash in these industries Almost all the industries had overstocking

of raw materials shown by increase in the share of raw material to total inventory while

share of semi-finished and finished goods came down It also revealed that long-term

funds as a percentage of total working capital registered an upward trend which was

mainly due to restricted flow of bank credit to the industries

Kasar and Tilekarrsquos (1984)16

study indicated that the sugar industry has

significant impact on the employment of seasonal migrants in Maharashtra The share of

sugar factory employment was to the extent of 4551 and 75 percent in the total employment

of an average male female and bullock pair of the migrant household As regards the

income it is noted that the sugar industry on an average contributes 57 percent of the

gross income of migrant household The seasonal employment provided by the sugar

industry enabled the migrant households to increase their income to enjoy a slightly better

position as compared to the non-migrants under study Therefore the policy has been

endorsed for the installation of agro-processing industries based on local raw produce in

rural areas in order to generate employment and income opportunities for the economic

development of weaker sections

The Government (1985)17

of Maharashtra appointed a Committee for studying

the problem of sick Co-operative sugar factories under the chairmanship of Shri Gulabrao

Patil The Committee found that inadequate supply of sugarcane lack of sugarcane

substantial increase in the project cost and lack of term loan arrangement associated with

15

NK Agrawal Management of Working Capital Sterling Publication Pvt Ltd New Delhi 1983 16

Kasar DV and Tilekar SN (1984) ldquoImpact of Sugar Industry on Employment and Income of Seasonal

Migratory from Households in Maharashtrardquo Indian Journal of Agricultural Economics Vol44 No3

1989 pp329 17

Government of Maharashtra (1985) Sugarcane Control Order Dated 28th

March pp3


21

relatively lower owner equity and excess burden of interest on short term loans lack of

experienced technical personal for efficient use machinery inefficient management and

lack of long term price policy for sugarcane were the major reasons for sustained losses

from sugar production on a continual basis

Singh Sinha and Singh (1986)18

examined various aspects of working capital

management in fertilizer industry in India during the period 1978-79 to 1982-93 Sample

included public sector unit Fertilizer Corporation of India Ltd (FCI)Hindustan

Fertilizers Corporation Ltd(HFC) The National Fertilizer Ltd Rashtriya Chemicals and

Fertilizers Ltd and Fertilizer (Projects and Development) India Ltd On the basis of ratio-

analysis and responses to a questionnaire study revealed that inefficient management of

working capital was to a great extent responsible for the losses incurred by the FCI and

its daughter units as turnover of its current assets had been low FCI and HFC units had

high overstocking of inventory in respect of each of its components particularly stores

and spares Similarly a quantum of receivables had been excessive and their turnover is

very low However cash and liquid resources held by FCI and its daughter units had been

much lower in relation to operation requirements So far as financing of working capital

was concerned long-term funds had been financing a low proportion of current assets

due to rapid increase of current liabilities The profitability providing an internal base for

financing of working capital had been very low in these undertakings

Mukerjee (1986)19

in his study on ldquoManagement of working capital in public

enterprisesrdquo in respect of central government industrial undertaking covering a period

from 1974-75 to 1978-79 has revealed that the current assets due to the accumulation of

inventories and current liabilities increased due to increase in financing payables The overall

size of the working capital requirements were not ascertained based on the consideration

as suggested for prudent financial management There was a significant negative correlation

between overall profitability and size of working capital The liquidity and probability had a

very significant negative correlation There was an over investment in structural determinants

and huge size of working capital due to faulty financial policies adopted by the units

18

Kamta Prasad Singh Anil Kumar Sinha and Subas Chandra Singh(1986) ldquoManagement of Working

Capital in Indiardquo Janaki Prakashan New Delhi 1986 19

Mukerjee AK (1986) ldquoManagement of Working Capital in Public Enterspricesrdquo Allahabad Vohra

Publishers and Distributors


22

Jagdish Lal and Bajpai (1987)20

have indicated that growth rate of sugarcane

production was highest in Tamil Nadu followed by Karnataka Maharashtra Punjab

Uttar Pradesh Andhra Pradesh and Bihar In the states with higher growth rates of area

and or production the variability in area production productivity and price were observed to

be higher in the states having higher growth rates of these variables They have said that

it is desirable to bring about substantial improvement in productivity for which efforts

should be made for replacement of currently grown varieties with superior ones timely

and adequate supply of strategic inputs effective transfer of plant and ratoon sugarcane

technology control of disease and pests drainage for water logged areas reclamation of

saline alkali soils and timely payment of cane price to farmers

Deepak Chawala (1987)21

studied an empirical analysis of the profitability of the

Indian man made fiber‟s Industries This study examined and explained the trends in the

profitability of India man made fiber‟s Industries The relevant data for the study was obtained

from 17 firms found in BSE official directory for the period 1963-64 to 1977-78 An increase

in the excise duty of man-made fiber‟s seems to be associated with the decline in profitability

of the industries Both concentration ratios and vertical integration influence the profitability

However the impact differs for cellulose and petrol chemical based group of fibers

Kharche (1987)22

has worked on the topic ldquoCooperative Sugar Factories in

Marathwada ndash A critical studyrdquo In his work he has discussed the licensing policy of sugar

industry of the Government of India Further he analyzed financial structure of cooperative

sugar factories In connection with the efficiency of sugar factories the importance of the

supply of sugarcane sugarcane development activities and other problems relating to the

supply of raw material ie sugarcane are also discussed in this study Furthermore he has

also studied the cost of production of sugar role of management in the development of the

sugar factories and the spread effects of cooperative sugar factories in their areas of

operation Finally he has analyzed the causes of sickness of sugar factories and has made

some recommendations to overcome the problems of sickness

20

Jagdish Lal and Bajpai (1987) ldquoMeasuring Growth in Area ProductionProductivity and Prices of

Sugarcane and its Competing Crops and Gur in Indiardquo Bharatiya Sugar 12(4) pp15 21

Deepak Chawala (1987) ldquoAn Empirical Analysis of Profitability of the Indian Man Made Fibers

Industryrdquo Decision pp 106-115 22

KharcheRM(1987) A Cooperative Sugar Industry In Marathwada Lease Industry for Development

Reference to Sick Factories from Marathwada and Vidarbha2(5) pp15


23

Kuchhadiya and Shiyani and Parmer (1988)23

observed an increasing trend in all

the variables of sugarcane and sugar production in Gujarat and India as a whole however the

growth rates were comparatively higher in the state as compared to the country as a whole

Furthermore they revealed that the variability of production was more than the variability in

area and yield of sugarcane in Gujarat as well as in India and arrived at the conclusion that

the cultivation of sugarcane crop in the Gujarat state was profitable to the farmers

Pandey and Bhat (1988)24

ldquoFinancial ratio patterns in Indian manufacturing

companies A Multi-Variate Analysisrdquo have analyzed the financial ratio patterns in

Indian manufacturing industries by taking 612 companies from 1965-66 to 1984-85

They have identified three groups of ratio that contain the maximum amount of

information about profitability and applied these ratios for the analysis of only

manufacturing and processing industries The three groups of financial ratios used were

(i) Return on Investment (profit before depreciation interest and tax to total tangible

assets) (ii) Sales efficiency (profit after tax to net sales) and (iii) Equity intensiveness

(retained cash flow operation to tangible net worth) Their study observed a declining

trend in profitability in relation to sales share holder equity and total investment the impact

of which increase with the increasing interest burden It was also found that these three

groups of ratios of profitability showed a consistent declining trend a cross most of the firms

Hinge Pawar and Narwadkar (1989)25

showed that the installed capacity was

over utilized in the healthy class while in the remaining classes it was under utilized due

to inadequate cane supply which in turn influenced per unit cost of production The gap

between the highest and the lowest per quintal cost of manufacturing sugar was Rs1183

per sugar factory per annum value of sugar was the highest in the healthy class followed

by medium and sick sugar factories The sugar factories belonging to all the classes

incurred loss However the loss was the highest in case of the sick sugar factories

The net loss of 100 tonnes of installed capacity was observed to be largely influenced by

the magnitude of return from sugar production In spite of the low per unit cost of

23

Kuchhadiya DB Shiyani BL and Parmar GD (1988) An economic Analysis of Sugarcane 39(9) pp 739 24

Pandey IM and BhatR (1988) ldquoFinancial Ratio Patterns In Indian Manufacturing Companies

A Multivariate Analysisrdquo Working pp764 August Indian Institute of Management Ahmedabad 25

Hinge VN Pawar (1989) JR and Narwadkar DS Production Performance of Co operative Sugar Units

in Maharashtra Indian Journal of Agricultural Economics XIV (3) and pp343


24

production of sugar the overhead costs were relatively very high in the case of sick

sugar factories These sugar factories sustained heavy losses The economics of scale

entirely depend on the ability of sugar factories to fully utilize the installed capacity

Verma (1989)26

evaluated working capital management in iron and steel industry

by taking a sample of selected units in both private and public sectors over the period

1978-79 to 1985-86 Sample included Tata Iron and Steel Company Ltd(TISCO) in

private sector and Steel Authority of India Ltd(SAIL) and Indian Iron and Steel

Company a wholly owned subsidiary of SAIL in public sector By using the techniques

of ratio analysis growth rates and simple linear regression analysis the study revealed

that private sector had certainly an edge over public sector in respect of working capital

management Simple regression results revealed that working capital and sales were

functionally related concepts The study further showed that all the firms in the industry

had made excessive use of bank borrowings to meet their working capital requirement

vis-agrave-vis the norms suggested by Tandon Committee

Nagarajan and Burthwal (1990)27

in their research work entitled profitability

and structure A firm level study of Indian pharmaceutical industry intensively examined

relationship between profitability and structure A sample of 38 Pharmaceutical firms in

India has taken for the study during the period of 1970-1982 The analysis demonstrated

that under the condition of price controls the most significant determinants of the

profitability of the firms in this industry was integration size and advertising intensity did

not appear to be major determinants This was perhaps due to the inability of firms to

translate their market power into prices because of the controlled the coefficient of

growth rate of sales was positive and significant suggesting that factors on the demand

side of a firm had a greater impact on profitability than on supply side

Harbir Singh (1990)28

in his study ldquoManagement of working capital A case

study of Modi Sugar Mills Modinagarrdquo has stated that the financial health of a company

26

Harbans Lal Verma (1989) ldquoManagement of Working Capitalrdquo Deep and Deep Publication New Delhi 27

Nagarajan and Burthwal (1990) ldquoProfitability and structure A firm level study of Indian Pharmaceutical

Industryrdquo the Indian Economic Journal Vol38 No2 pp70-84 28

Harbir singh (1990) ldquoManagement of Working Capital A Case Study of Modi Sugar Mills Modinagarrdquo

Dissertation Meerut University Published in a Survey of Research in Commerce and Management

pp 477-483


25

can be improved if stringent control is excised on raw materials stores and spares and

also by reducing the unprofitable investment blocked in current assets the cash flow can

be regulated the companies prepare weekly cash flow statement and cash budget on a

regular basis

Krishnaveni (1991)29

in her study evaluated the impact of policy changes in

1982-1992 on profitability and growth of firms in the industry using tobin‟s 9 as a

measure of profitability The study finds no evidence to show that firms had made super

normal profits The profitability was found to be explained mainly by age of the firms

vertical integration diversification and industry policy dummy variables important

determinants of growth of firms found as diversification Industries Policy dummy

variable gross retained profits and expansion of capacities results also real erect in

performance between car and non car sector as well as within the sectors of the

industries

Cleveland and Firedevicle (1993)30

in their study ldquoProfitability Uncertainty and

Firm Sizerdquo examined the connectors between variation in profit and loss rates among

firms size classes reflections of uncertainty They found that within industries such

variations are particularly great for firms in small-firms size classes leading to operating

policies for small firms in best characterized as entrepreneurial large firms in contrast

faced with less uncertainly in earning profit appear in adopt polices that manifest an

emphasis on strategic planning

Pavi Vadivel and Kamala (1995)31

studied about the financial performance of

the diversified companies an effort was made to study the relationship between

diversified firms and their financial performance Seven large firms having different

products both related and otherwise in their portfolio and operating in diverse industries

were analyzed A set of performance measures ratios was employed to determine the

level of financial performance The results revealed that diversified firms studied had

29

Krishnaveni (1991) ldquoProfitability and Growth in Indian Auto Mobile Manufacturing Industryrdquo Indian

Journal of Economic Growth Vol 26 pp 81-97 30

Cleveland And FiredevicleW (1993) ldquoProfitability Uncertainly And Firm Sizerdquo Small Business

Economic Vol5 pp87-100 31

Pavi VS VadivelV and Kamala KH (1995) ldquoDiversities Companies and Financial Performance

A Studyrdquo Finance India VolIX N 4 pp 977-988


26

been healthy financial performance However narration in performance from one firm to

another had been observed and statically established

In RBI Study (1995)32

an attempt was made to study the financial performance of

private corporate business sector During the period 1994-95 1030 company concerned

in this study 925 were non-financial companies and 105 were financial companies

The results of the financial and non-financial were also analyzed Size wise apart from

the analysis of the consolidated results for the entire sectorThe good corporate

performance during 1994-95 is reflected in major profitability ratios registering distinct

improvement in the year under review as compared to the previous year

Vijayakumar and Venkatachalam (1995)33

in their study on ldquoWorking capital

and Profitability-An empirical Analysis with reference to Indian automobile industryrdquo

In summary the literature review indicates that working capital management impacts on

the profitability of the firm but there still is ambiguity regarding the appropriate variables

that might serve as proxies for working capital management The present study

investigates the relationship between a set of such variables and the profitability of a

sample of Indian Automobile firms Further most of the Indian studies used traditional

liquidity ratios viz current and quick ratio as a measure of liquidity Only a very few

studies used Cash Conversion Cycle (CCC) as a measure for liquidity Therefore to fill

this gap in the literature as attempt has been made in this part to study the relationship

between cash conversion cycle and profitability of Indian automobile firms


studied the impact of working

capital on profitability in sugar industry in Tamil Nadu by selecting a sample of 13

companies 6 companies in Co-operative sector and 7 companies in private sector over

the period 1982-83 to 1991-92 They applied simple correlation and multiple regression

analysis on working capital and profitability ratios They concluded through correlation

and regression analysis that liquid ratio inventory turnover ratio receivables turnover

32

RBI Corporate Studies Division (1995) ldquoPerformance of Corporate Business Sector during the First

Half of 1995rdquo Finance India VolXVII No3 pp987-1002 33

Vijayakumar and Venkatachalam (1995)ldquoWorking Capital Managaement in Sugar Mills of Tamil Nadu ndash

A Cash Studyrdquo Management and Labour Studies Vol 20 No4 October 1995 pp 246-354 34

Vijayakumar A and A Venkatachalam (1995)ldquoWorking capital and Profitability-An empirical analysisrdquo The

Management Accountant pp748-50


27

ratio and cash turnover ratio influenced the profitability of sugar industry in Tamil Nadu

They also estimated the demand functions of working capital and its components ie

cash receivables inventory gross working capital and net working capital by applying

regression analysis They showed the impact of sales and interest rate on working capital

and its components When only sales was taken as independent variable coefficient of

sales was more than unity in all the equations of working capital and its components

showing more than unity sales elasticity and diseconomies of scale When sales and

interest rate were taken as independent variable sales elasticity was again more than

unity in demand functions of working capital and its components except cash So far as

capital costs were concerned these had negative signs in all the equations but significant

only in inventory gross working capital and net working capital showing negative impact

of interest rates on investment in working capital and its components Thus study showed

that demand for working capital and its components was a function of both sales and

carrying costs

Vijayakumar (1996)35

in his study ldquoDeterminants of Profitabilityrdquo has examined the

determinants of profitability in sugar Industry of Tamil Nadu for the period 1982-1994

He has identified that growth rate of sales vertical integration leverage current ratio and

operation expenses to sales are the important variables which determinate the profitability

of firms in the industry He has revealed that efficiency in inventory management and

current assets are foot steps to improve profitability


in ldquoAssessment of Corporate Liquidityrdquo- A discriminated

analyzed approach had revealed that the growth rate of sales leverage current ratio

operating expenses to sales and vertical integration in the sugar industry Further the

author had studied the short term liquidity position in 28 selected sugar factories in

Co-operative and private sector as discriminated from poor risk companies based on current

and liquidity ratios Discriminating bdquoz‟ scores have been calculated with the help of

discriminate function and according to the bdquoz‟ scores the companies are ranked in the order of

liquidity

35

VijayakumarA (1996) ldquoDeterminants of Profitabilityrdquo Finance India Vol X No4 December pp925-932 36

VijayakumarA (1996) an ldquoAssessment of Corporate Liquidity- A Discriminate Analysis Approachrdquo Research

Studies In Commerce and Management Classical Publishing Company New Delhi pp 180-191


28

Beaumont Smith and Begemann (1997)37

in their study ldquoMeasuring association

between working capital and return on investmentrdquo have studied the data of 135 firms

for the years 1984-1993The main objectives of the study is to identify the association

between working capital and return on investment and to find out whether the more

recently developed alternate working capital measures show improved association with

return on investment than of the traditional working capital ratios The firm listed on

Johannesburg stock exchange was considered for study Chi-square test and step-wise

regression were applied and it was found that the traditional working capital leverage

measures of total current liabilities divided by fund flow accounted for the greatest

association with return on investment

Gangadhar (1997)38

in his study ldquoFinancial Analysis of Companies in Eritrea

A Profitability and Efficiency Focusrdquo has made a profitability and financial analysis of

companies in Eritrea to study the impact of various factors influencing efficiency and

profitability of companies through studying the impact of the factors responsible for such

profit through sales and asset efficiency The study placed its main emphasis on various facts

of profitability namely to examine the liquidity position of the companies to study the long

term solvency position to evaluate the use of asset efficiency analyzing their impact on the

computation of various ratios relating to profitability liquidity solvency and asset

management Whereas the two companies were compared financially the study identified

that ROI (Return On Investment) has achieved more relatively higher uniform and stable

trend over the study period

Hyun-Han shin and Lucsoenen (1998)39

in their study ldquoEfficiency of Working

Capital Management and Corporate Profitabilityrdquo have identified that there is a strong

negative relationship between the length of the firms Net Trade Cycle (NTC) and the

profitability with 58985 firms covering the period of 1975-1994 In addition shorter

Net-Trade Cycles are associated with higher risk-adjusted stock returns The study

37

Beaumont Smith and BegemannE (1997) ldquoMeasuring Association between Working Capital and Return

on Investmentrdquo South African Journal of Business Managementrdquo March Vol 28 pp81-92 38

Gangadhar V (1997) ldquoFinancial Analysis of Companies In Eritrea A Profitability and Efficiency

Focusrdquo The Management Accountant 39

Hyun-Han shin and Lucsoenen (1998) ldquoEfficiency of Working Capital Management and Corporate

Profitabilityrdquo Financial Practice and Education fall winter pp68-79


29

identified that the NTC is measuring liquidity different from the more conventional

current ratio which is positively related to profitability

Agarwal (1999)40

studied the profitability and growth in Indian Automobile

Manufacturing Industry The objective of this study was to evaluate the impact of policy

changes since 1981-82 on profitability and growth of firms in the industry using tobin‟s

square as a measure of profitability The study finds no evidence to show that firms have

made super normal profits Profitability was found to be explained mainly by the age of

the firms vertical integration diversification and industry policy dummy variable

Important determination of growth of firms are found as diversification industry Policy

dummy variables gross retained profits and expansion of capacities

Sahu (2000)41

analyzed the corporate profitability in multivariate approach

This was as empirical based study on the secondary data from a sample of 100 non-financial

non-government public limited companies in eastern India for a span of ten years

This study attempted to measure the composite profitability of a firm by single index

facilitating case of comparison and ranking The main objective of the study is the degree

of relationship between ratios

George Gallinger (2000)42

in his study ldquoReturn on Assets Performancerdquo has examined

the framework of financial statement analysis The profitability of SALTON Company

has been examined in this study where its components related to return on sales and asset

managements were analyzed in depth According to him inefficient assets management

will result in destroyed market value of the company and will probably causes financial

distress problems that may even result in bankruptcy The study revealed that if the

weighted average cost of capital on the profit before tax basis exceeds the return on

assets the company would need to improve the performance through higher return on

sales increased asset turn over or both

40

Agarwal N and Singla SK (1999) How to Develop A Single Index For Financial Performance Indian

Management Vol12 No5 pp 59-62 41

Sahu RK (2000) ldquoAnalysis of Corporate Profitability A Multivariate Approachrdquo The Management

Accountant Vol35 No8 August pp571-577 42

George WGallinger (2000) ldquoFramework for Financial Statement Analysis Part I Return-on Assets

Performancerdquo Business Credit February Vol102 Issue2 pp103 -105


30

Rajeswari (2000)43

carried out a study on ldquoLiquidity Management of Tamil Nadu

Cement Corporation Ltd Alangulam- A case studyrdquo Data was collected from the annual

reports of TANCEM for a period of five years from 1993-94 to 1997-98 to analyze the

liquidity position of TANCEM It was concluded from the analysis that the liquidity

position of TANCEM was not stable It was observed from the liquidity ratio that their

two much of liquidity in the first two years of the study period It was concluded that the

liquidity management of TANCEM was poor and not satisfactory Since a very high

degree of liquidity is also as bad as an idle asset and efforts profitability

Srinivasan (2001)44

suggested in his study that the opportunity for using by-product

molasses which will be available in increasing quantities for producing industrial and

potable alcohol alcohol-based chemicals and ethanol should be fully utilized There is

also scope for adopting co-generating system on ambitious lines for generating power and

producing steam with the use of bagasse in high pressure boilers Any surplus power can

be sold to Tamil Nadu Electricity Board Grids at price advantages to both parties These

measures can help in reducing all manufacturing costs noticeably

Jadhaw (2001)45

told that approximately 70 percent of total world sugar

production is consumed domestically in the countries of origin and about 25 percent is

exported to other countries It has been found from the study that the cost reduction is a

continuous process of follow up It needs evaluation redesigning and reevaluation It is

difficult to suggest ldquoUniversal Cost Reduction Techniquesrdquo To achieve cost reduction it

is necessary to follow the below mentioned steps

1 Establishing our own standards

2 Measuring performance against these standards and

3 Correcting deviation from standards

It is also pointed out that the trust areas for cost reduction are improvement of

efficiency and productivity along with reducing wastage of man-hour materials and

energy

43

RajeswariN ldquoLiquidity Management of Tamil Nadu Cement Corporation Ltd Alangulam-A Case

Studyrdquo the Management Accountant Vol 35 No5 May 2000pp 377-378 44

SrinivasanN (2001) ldquoDecontrol overduerdquo the Hindu Survey of Indian Industry pp297 45

Jadhav MG (2001) ldquoWorld Sugar Market Structured Fluctuation and Hope for India Sugarrdquo Co ndashOperative

sugar Volume 33 No2 October pp147


31

Pokharkar Kasar and Shinde (2001)46

have pointed out that basic objective of the

study has been to examine low productivity of sugarcane and profitability for different

planting types in different recovery zones in Maharashtra It has been concluded that there is

a need to popularize the improved crop production technology among the sugarcane growers

It will ensure reduction in a cost of cultivation on one hand and maintain the productivity of

sugarcane The input infrastructure has to be properly developed so that crucial inputs would

be available to the growers in time to improve productivity

Dabasish sur Joydeep and Prasenjit Ganguly (2001)47

studied the ldquoLiquidity

Management in Private Sector Enterprises- A case study of Indian Primary Aluminum

Industryrdquo for the period 1989-90 to 1996-97 using the data as HINDALCO and INDAL taken

from the stock exchange official directory of the Mumbai stock exchange The researcher

concluded that the overall liquidity management at INDAL was better in terms of

Efficiencies utilization of short term funds whereas HINDALCO was unable to do so

It was observed that the liquidity and profitability were found to be positively correlated

to a great extend in the both companies

Debasish Rej and Debasish Sur (2001)48

undertook a study entitled

ldquoThe Profitability Analysis of Indian Food Products Industry A case study of Cardbury

India ltdrdquo The relationship among various profitability ratios and their joint impact were

analyzed using multiple correlations co-efficient and multiple regression method

The study revealed that there was no correlation between the selected ratios

Syed Mohammed Ather (2001)49

in his study examined ldquoThe Profitability of Public

Industrial Enterprises in Bangladeshrdquo The profitability of sample enterprises at shadow prices

was higher than the prevalent bank rates of interest So the performance was not poor during

the study period The inefficient use of working capital and fixed assets both seem to contribute

greatly to show decreasing trends of public profitability at constant shadow prices

46

Pokharkar VG Kasar (2001) DV And ShindeHR Cases Low Productivity and Profitability Article

Published in Co-operative Sugar 47

Debasish Sur Joydeep Biswas and Prasenjit Ganguly ldquoLiquidity Management in Indian Private Sector

Enterprises-A case Study of Indian Primary Aluminum Industryrdquo Indian Journal of Accounting VolXXXII

June 2001 pp8-14 48

Debasish Rej and Debasish sur ldquoProfitability Analysis of Indian Food Products Industry A case study of

cardbury India Ltdrdquo The Management Accountant Vol36 No11 Nov 2001 pp845-849 49

Syed Mohammed Atherrdquo A Profitability of Public Industrial Enterprises in Bangladeshrdquo Indian Journal

of Accounting VolXXXII June 2001 pp47-58


32

Samar K Datta (2002)50

computed and presented the growth rates of production

and yield of sugarcane in his study based on the source from Ministry of Agriculture

Government of India Agriculture statistics at a glance 2001 It has been found that the

compound growth rate of production of sugarcane was only 270 and yield of sugarcane

was only 082 during 1991-92 to 2000-01

Bhattachrayya (2002)51

discussed in his study the negative export growth of

sugar and molasses during 1995-96 to 1999-2000 It showed that it was 15162 in 1995-96

30389 in 1996-97 6868 in 1997-98 581 in 1998-99 and 874 in 1999-2000 However

during 1999-2000 more than 70 percent of India‟s agricultural exports have shown positive

growth trend while only 27 percent of agro exports(including sugar and molasses) have

shown a negative trend

Rajesh Kumar and Misra (2002)52

In their study an effort has been made to

delineate sugar recovery zones in the country for the efficiency planning and development of

Sugar Industry The objectives of identifying different sugar recovery zones into

emphasis that the crop area quality and quantity of water infrastructure cane processing

technology sugarcane supply management etc are quite different in different areas of

the country and require appropriate approaches The study was concentrated on this 137

Districts and 5 Zones where demarcated More than 85 percent sugar factories are located

in these Districts As the average recovery increase from Zone I to V average during of

crushing and factory productivity have also been found to increase thereby a close

association of the factors with recovery


in his work ldquoDeterminants of Profitability- A firm level

study of the Sugar Industry of Tamil Nadurdquo made an attempt to study the various

determinants of profitability viz growth rate of sales vertical integration and leverage

The study was also conducted by computing current ratio operating expenses to sales

ratio and inventory turnover ratio The author employed econometric models to test various

50

Samar (2002) KDatta‟Indian Agriculture Retrospects and prospect‟ Yojana January pp10 51

BhattachrayyaB (2002) Global Competitiveness of India Agriculture Yojana January PP23amp25 52

Rajesh Kumar and misra SR (2002) Sugar Recovery Zones of India-Delineation and Critical analysis

Sugar Tech Volume IV (1amp2) 38-44 pp38 53

VijayakumarA (2002) Determinants of Profitability -A Firm Level Study of the Sugar Industry of Tamil

Nadu The Management Accountant pp458-465


33

hypotheses relating to profitability with other variables It was concluded that efficiency

in inventory management and current assets were important to improve profitability


carried out a study entitled ldquoAssessment of Corporate

Liquidity- A Discriminate Analysis Approachrdquo in which 5 Co-operative sugar mills and 5

private sector companies in Tamil Nadu were taken into consideration among 14 cooperative

sugar mills and 14 private sector sugar mills Only those units which were established before

1984 and having a crushing capacity of 2000 metric tonnes per day were selected for the study

The discrimination analysis was employed to determine the combined effects of the ratios

The author concluded that the Co-operative sector was classified as poor risk in all the selected

years on the basis of current and liquid ratio The author further concluded that the same

became good risk during the years 1986-87 and 1987-88 on the basis of discriminating bdquoZ‟

score The study revealed that the over all liquidity position of the industry was satisfactory

Devek Bosworth and Joanne Loundes (2002)55

in their study entitled the

dynamic performance of Australian enterprises investigate the interaction of discretionary

investments (RampD capital investment training and advertising) innovation productivity

and profitability with in a dynamic frame work of firm performance A dynamic and

closed model of firm performance was setup and the resulting empirical model was

tested as series of recursive equations using a four year balanced panel data set of

Australian firms drawn from the business longitudinal survey The results indicated that

current economics profit has an important role to play in enabling firms to invest and the

finding indicates which of these investment are complements and which are substitutes

Wolfgang Aussenegg and Ranko Jelic (2002)56

examined the operating

performance of 154 polish Hungarian and Czech companies that were fully or partially

privatized between January 1990 and December 1990 The study revealed that privatized

firms in the sample did not manage to increase profitability and significantly reduce the

54

Vijayakumar A ldquoAssessment of Corporate Liquidity-A Discriminate Analysis Approachrdquo Research

Studies in Commerce and Management Classical Publishing Company New Delhi 2002 pp121-130 55

Devek Bosworth and Joanne loundes (2002) The Dynamic Performance of Australian Enterprises

Melbourne Institute of Applied Economics and Social Research The University of Melbourne Working

pp 032002 56

Wolfgang Aussenegg and Ranko Jelic (2002) Operating Performance of Privatized Companies in

Transition Economics-The Case Of Poland Hungary and The Czech Republic Research Abstract

Source WwwSsrnCom


34

efficiency and output in the post privatization period The study further revealed that

private sector IPO‟s under perform their privatization counterpart in forms of profitability

efficiency capital investments and output Finally firm‟s size did not seem to influence key

performance measure in selected companies

Jack Glen Kevin Lee and Ajit Singh (2002)57

in their study presents time-series

analysis of corporate profitability in seven leading Developing Countries (DCs) using the

common methodology as the Persistence of Profitability (PP) studies and systematically

compare the results with those for Advanced Countries (ACs) Surprisingly both short

term and long term persistence of profitability for DCs was found to be lower than those

for ACs This study concentrated on economic explanation for this finding It also report

the results on persistence of two components as profitability-capital output ratios and

profit margins These two components raise are important general issues of economic

interpretation for Persistence of Profitability (PP) studies which are outlined

Shanmugam and Bhaduri Saumitra (2002)58

in their study analyzed growth of

the Indian manufacturing companies taking a sample of 390 companies during 1990-

1993 The age and size of the companies were taken as independent variables and growth

in sales as dependent variable The statistical techniques such as mean standard deviation

and regression analysis were used to study the growth of the companies The study showed

that the age was positively influenced the growth and size had negative and significant

impact on growth

Sirohi (2003)59

suggested that the sugar mills and their associations with the

assistance of the Ministry of Consumer Affairs Public Distribution System and the Sugar

Directorate should take a long term approach to overcome the negative financial scenario

of the sugar mills The suggested approaches are 1) Maintenance of 3-4 months sugar

consumption as carry over for next season 2) Reduction in cost of production 3) Production

of better quality of sugar 4) Maximum saving of fuel 5) Assessment of benefits of

57

Jack Glen Kevin Lee and Ajit Singh (2002) Corporate Profitability and the Dynamics of Competition in

Emerging Markets- A time Series Analysis ESRC Center for Business Research University of

Cambridge and Working pp248 58

Shanmugam KR and Bhadurai Saumitra N (2002) ldquoSize Age and Firm Growth in the Indian

Manufacturing Sectorrdquo Applied Economics Letters pp607-613 59

Sirohi(2003) SS Options for Revival Of Sugar Industry During Negative Financial Scenario

Cooperative Sugar Vol34 No9 pp712


35

producing rich sugar molasses considering mandatory mixing of 5 percent anhydrous

alcohol in petrol and 6) production of value added products

Vijayakumar and Kadirvelu (2003)60

studied ldquoProfitability and Size of Firm in

Indian Minerals and Metal Industryrdquo Generally it was suggested that the larger the firm

may be in a position to earn a higher rate of return on its investment than the smaller firm

similarly a counter argument was that size breed‟s inefficiency and profitability may decline

with size of firms Those if becomes necessary to study the relationship between size and

profitability of the firms for this purpose Indian public sector minerals and metal

Industry have been selected The study revealed that size was found to be significantly

associated with the profitability during the study period It was also seen from the analysis

that size was positively associated with the profitability Thus larger firm may be in a position

to earn higher rate of return on investment through diversification and moving into higher

technology

Dangat Nilesu (2003)61

in his article on ldquoCo-operative Sugar Factories in

Maharashtrardquo analyzed functioning of sugar industry in the state during 2000-01 Among

the 436 sugar factories operating in India 137 sugar factories were operating in

Maharashtra alone The soil and climate conditions of Maharashtra are favorable for

the cultivation of sugar cane The Co-operative sugar factories in Maharashtra were the

formers organization and they served as the primary force to the development of the rural

areas These factories provided employment to a large numbers of workers in the

villages A sugar factory with a daily crushing capacity of 2500 tonnes provide

permanent employment to 416 persons and seasonal employment to 653 persons

Sudarsana Reddy (2003)62

carried out an extensive study on ldquoFinancial

Performance of Paper Industry in Andhra Pradeshrdquo for the 10 years period from 1989-90

to 1998-99 by collecting data from companies having installed capacity of more than

33000 tonnes per annum The primary objectives of the study were to analyze the

60

VijayakumarA and KadirveluS (2003) Profitability and Size of the Firm in Indian Mineral and Metals

Industry the Management Accountant pp816-821 61

Dangat Nilesh (2003) ldquoCo-operative Sugar Factories in Maharashtrardquo Co-operative Perspective Vol38

No1 April-June pp8-13 62

Sudarsana ReddyA (2003) ldquoFinancial Performance of Paper Industry in Andra Pradeshrdquo Finance India

Vol XVII No3 Sep2003 pp1027-1033


36

investment pattern and utilization of fixed assets to review the profitability performance to

ascertain the financing methods and to suggest measures to improve the profitability

ratios trend common size comparative financial statement and statistical tests have been

applied in a appropriate context The main findings of the study is that Andhra Pradesh

paper industry needs the introduction of additional funds along with restructuring of

finances and modernization of technology for better operating performance

RBI corporate division (2003)63

studied the performance of corporate business sector

during the first half of 2002-2003 The results of 146 private companies of various

sectors were analyzed On the various parameters of performance aggregation and

comparison of the results of the first two quarters were done on these performance

parameters It was concluded that the performance of the private sector was better than

compared with the first half of the previous year (2001-2002) This was indicated by the

following parameters viz higher sales reduced interest payments and ultimately

improved profitability

Ghosh and Santi Gopal Maji (2003)64

in ldquoUtilization of current assets and

operating profitabilityrdquo An empirical study on cement and tea Industries in India Made

an empirical study on utilization of current assets and operating profitability data for 11

firm of cement and tea industries were collected for the period 1992-93 to 2001-02 The

study concluded that the degree of current assets were positively associated with the

operating profitability of the firm

Aarathi Kirshnan (2004)65

pointed out that the anticipated tightening of supplies

has already setoff an upward spiral in sugar prices which have firmed up by about

20 percent over the past year In the festival demand for sugar which peaks in the September

January period could keep prices high especially as supplies from the next crushing

season will trickle in only from NovemberDecember Even when crushing does start the

less than comfortable stocks could be continue to sustain firm trends in sugar prices As

63

RBI Corporate Studies Division (2003) Performance of Corporate Business Sector During the First Half

of 2002-2003 Finance India VolXVII No3 pp987-1002 64

Santany Kumar Ghosh and Maji (2003) Utilization of Current Assets and Operating Profitability an

Empirical Study on Current and Tax Industries in India Indian Journal of Accounting VolXXXIV pp52-60 65

Aarathi kirshnan (2004)ldquoSugar-Receiving After The Caningrdquo ndashArticle Published In Portfolio Organizer pp43


37

sugar prices continue to rule high players with huge inventories in their books will get to

liquidate their stocks at lucrative prices

Maninder Sarkaria and Shergil (2004)66

aimed to test how market structure

may affect performance The study had employed model consulting determinants of both

structure and profits In order to decompose the variation performance variables like

industry effect seller concentration market share capacity utilization size leverage

skill risks age and capital intensity had been included in the regression models as the

determinants as performance The study results suggested that market share was positively

and concentration was negatively related to performance


in their study ldquoDeterminants of

Profitability The case of Indian Public Sector Power Industriesrdquo has presented a basic

model of multiple regression of profitability using return on total assets and profit margin

to sales ratio as the major indicators of profitability The study is mainly focused to

examine the determinants of profitability in the selected Indian public manufacturing

industries during the period of 1981-2002 The determinants of profitability are analyzed

using the technique of ordinary least square Regression technique has been used to

reduce the problem of auto correlation Return on assets and return on sales are widely

used measure of profitability Size was used as measure of total assets growth by

measure of growth rate of assets The other independent variables employed in the study

include leverage current ratio inventory turnover ratio operating expenses to sales ratio

vertical integration and age The study was evaluated using two multiple regression

models one by using return on total assets as dependent variable and other using profit-

margin on sales as dependent variables The study identified that the age was strongest

determinant of profitability followed by operating expenses to sales ratio leverage fixed

assets turnover ratio inventory ratio size current ratio growth rate and vertical

integration and further size operating expenses to sales ratio and fixed assets ratio have

negative contribution in variation of profit in the Indian public sector power industries

66

Maninder SSarkaria Shergil US (2004) Market Structure and Financial Performance-An Indian

Evidence with Enhanced Controls PhD Thesis Submitted to the Guru Nanak Dev University 67

Vijayakumar and Kadirvelu (2004) ldquoDeterminants of profitability The case of Indian Public Sector

Power Industriesrdquo The Management Accountant Febrruary pp 118-124


38

Adolphus (2005)68

has studied ldquoCorporate Liquidity Management Practices of

Nigerian Manufacturing enterprisesrdquo This study has intended to investigate and subsequently

improve the capability of corporate finance executives in handling acute liquidity shortages

through optimal cash flow management within a risk return framework This study was based

on three models Viz operating cycle cash flow cycle and design of marketable securites

portfolio The study revealed that the finance manger in manufacturing enterprises have to

redefine their strategy for managing anticipated and unanticipated financing gaps

Hamalakshmi and Manicham (2005)69

had made a study of this Financial

Performance Analysis of Selected Software Companiesrdquo In this study they examined the

management of finance playing crucial role in the growth It was concerned within

examining the structure of liquidity position Leverage position and profitability position

of selected thirty four software companies in India for a period of five years (1997-98 to

2001-2002) The study revealed that the liquidity position and working capital were

favorable during the period of study The result indicated that the overall profitability

position of selected software companies had been increasing at a moderate rate The

development will create large domestic demand over the next few years

Mallik and Debasish Mukherjee (2006)70

had studied the performance of leasing

industry in West Bengal This empirical study conducted covering fourteen leasing financing

companies in West Bengal An attempt was made to ascertain the profitability and to make a

comparative analysis of the selected companies with the help of ratio analysis

The performance of the selected units were evaluated The findings of the study indicated

good performance of leasing industry in West Bengal over the period of the study

Renu Luthra Varishanmpayan and Dheeraj Misra (2006)71

had made Study

Profitability and Size a Study of Small Scale Industries in Uttar Pradesh The objective of

his study was to assess the importance of certain structural variables for determining the

68

Adolphus (2005) ldquoEmpirical Survey of Corporate Liquidity Management Practices of Nigerian

Quoted Manufacturing Enterprisesrdquo Journal of Financial Management and Analysis Vol18(2)

February 2005 Pp41-55 69

Hamalakshmi R and ManichamM (2005) ldquoFinancial Performance Analysis of Selected Software

Companyrdquo Finance India Vol XIX No3 pp915-935 70

Mallik UK and Debasish Mukherjee (2006) Performance of Leasing Industry in West Bengalrdquo the

Management Accountant Vol41 No5 May pp393-398

71

Renu Luthra Raishampayan JV and Dheeraj Misra (2006) ldquoProfitability and Size A study of Small Scale

Industries in Uttar Pradeshrdquo The ICFAI a Journal of Management Research VolV No1 Januarys pp28-37


39

profitability of firms in a small scale business in India A single equation regression

framework had been chosen as the method of analysis the relationship between profitability

and different determinant of size such as total assets scale of operation etcIt was studied

by regressing the profitability on each of these variables In this study hypothesis that

profitability of small business firm was a function of its size has been tested A preliminary

cost section analysis of the concerned relationship was also done

Sushma Vishnavi and Bhupesh Kr shah (2006)72

had studied the role of

working capital in profit generating process The companies desire to take a greater risk

for bigger profit and losses It reduces the size of its working capital in relation to its

sales It was interested in improving its liquidity It increases the level of working capital

However this policy was likely to result in reduction of sales volume and profitability In

this study of Indian consumer electronics Industry for assessing the impact of working

capital on profitability during 1994-95 to 2004-05 The impact of working capital and

profitability had been examined by computing co-efficient of correlation and regression

analysis between profitability and working capital ratio

Thirumavalavan (2006)73

in his study entitled ldquoDeterminants of Earnings Before

Interest and Tax (EBIT) of Aluminum Companiesrdquo intensively measured the profitability

and performance of a corporate entity either internally or externally Earnings before

interest and tax were major variables used to measure the internal performance of business

entity could be mainly influence by internal as well of external variables External variable

of economic and industry are too large and highly dynamic In this study an attempt had

been made to find out the internal variables which influence the earning before interest and

tax of aluminum companies through multiple regression the results were HIDALGO‟s ECIT

was mostly influenced by fixed assets and net worth and INDACO‟s EBIT was mostly

influenced by cost of sales and profits retained

72

Sushma Vishnavi (2006) ldquoInter-Relationship Between Productivity and Profitability Analysis For

Industrial Take-Offrdquo The Management Accountant Vol 10-29 June pp308-310 73

ThirumavalvanP (2006) ldquoDeterminants of Earnings Before Interest and Taxation (EBIT) Of Aluminous

Companiesrdquo PSG Journal of Management Research Vol1 No2 April June pp33-37


40

Singh (2007)74

studied Performance Assessment of the Sugar Industry and

setting targets for the relatively inefficient mills to improve their efficiency and

productivity is crucial As the interest of various stakeholders are largely dependent on its

performance This study therefore attempts to assesses the performance of the sugar

mills of Utter Pradesh the largest sugarcane producing state of India Data envelopment

analysis models have been applied on the input-output data of 36 sugar mills for the

period 1996-1997 to 2002-2003This study finds that the average overall technical efficiency

in the sugar mills of the state has been 93 percent This implies that an average mill can make

radical reduction in all its inputs by 7 percent without detriment to its output levels

BogetoftBoyePetersen and Nielsen (2007)75

The reform of the EU sugar

regime involves significant price reductions for sugar and sugar beet They examine

whether the Danish sugar industry can maintain production and profit levels by

reallocating production from less to more efficient farmers The impact of alternative

reallocation mechanisms is estimated using a DEA model of sugar beet production

together with information about processing capacity at the three Danish plants beet

transportation costs and alternative crop options The analysis shows that the present

allocation is far from efficient With the new reform fully implemented and the quota

efficiently reallocated actual production will fall by only 25 per cent although profit will

be substantially lower

Robert L Howse and Bernard Hoekman (2007)76

studies on an important

recent World Trade Organization dispute settlement case for many developing countries

concerned European Union exports of sugar Brazil Thailand and Australia alleged that

the exports have substantially exceeded permitted levels as established by European

Union commitments in the WTO This case had major implications for both European

Union sugar producers and developing countries that benefited from preferential access

74

S P Singh (2006) ldquoPerformance of Sugar Mills in Uttar Pradesh by Ownership Size and Locationrdquo

Prajnan VolXXXV No4 2007 75

Peter Bogetoft Kristoffer Boye Henrik Neergaard-Petersen and Kurt Nielsen (2007) Reallocating

Sugar Beet Contracts Can Sugar Production Survive in Denmark European Review of Agricultural

Economics Vol 34 No 1 pp 1-20 2007 76

Robert L Howse and Bernard Hoekman (2007) European Community-Sugar Cross-Subsidization and

the World Trade Organization World Bank Policy Research Working pp 4336


41

to the European Union market It was also noteworthy in the use of economic arguments

by the WTO dispute settlement panel which held that the excess sugar exports were in

part a reflection of illegal de facto cross-subsidization-rents from production that

benefited from high support prices being used to cover losses associated with exports of

sugar to the world market Although in principle the economic arguments of the panel

could apply to many other policy areas in practice WTO provisions greatly limit the

scope to bring similar arguments for trade in products that are not subject to explicit

export subsidy reduction commitments of the type that were made for sugar and other

agricultural commodities

Thiyagu (2008)77

in his study ldquoDeterminants the Profitability Analysis of Private

Sector Sugar Industries in Indiardquo The researcher takes 41 sugar industries for his study

Mean Co-efficient of variation T-test Correlation Multiple Regression Stepwise Regression

Path analysis are statistical tools used for his analye His main objectives are determining

the profitability of selected industry and analysis the financial performance He suggested

that the companies shall resort to borrowings that total borrowings always less than that

of the share capital and reserves and surplus

Tamizhselvan (2008)78

studied ldquoProfitability Analysis of South Indian Private

Sector Sugar Industriesrdquo The researcher‟s main objectives of the study is to analyse the

quantum of profit among Industries and trend analysis of profitability effective

utilization of fixed assets and current assets The researcher used various statistical tools

and Alt-man Z-Score model and further analysed profitability liquidity and working

capital

David Kelch Johannes Umstaetter and Aziz Elbehri (2008)79

study on The

European Unions sugar policy in place since 1968 underwent its first major reform in

2005 in response to mounting and unsustainable imbalances in supply and demand The

reform however targeted only a few policy instruments (intervention price cut voluntary

85

Thiyagu (2008) ldquoDeterminants of Profitability In Sugar Industry A Study With Special Reference to

Selected Sugar Companies in Indiardquo PhD Thesis Bharathiar University March 2008 78

Tamizhselvan (2008) ldquoProfitability Analysis of South Indian Private Sector Sugar Industryrdquo PhD

Thesis Bharathiyar University October 2008 79

David Kelch Johannes Umstaetter and Aziz Elbehri (2008) ldquoThe EU Sugar Policy Regime and

Implications of Reformrdquo Economic Research Report No 59


42

production quota buyout and restrictions on non quota sugar exports) while leaving

other key policies unchanged (interstate quota trading sugar-substitute competition and

import barriers) Consequently the extent of the reforms impact is limited compared

with more far-reaching alternatives particularly when the oligopolistic nature of the

industry and its noncompetitive pricing behavior are taken into account A model based

analysis suggests that the reforms by themselves are unlikely to induce price adjustments

sufficient to reduce overproduction unless quotas andor high tariffs are reduced

Dheenadhayalan andDevianbarasi (2009)80

This study confines itself to ldquoIssues

relating Financial Performance of NPKRR Cooperative Sugar Mill Ltdrdquo The prime objective

of the Study is to identify the relationship between liquidity and profitability of sugar mills In

this aspect one of the famous and old cooperative sugar mills namely NPKRRCSML was

selected for the study as sample unit Since it was ranked as 3rd in term of return on investment

6th in terms of interest coverage ratio and 7

th in term of debt equity ratio among 12 major

cooperative sugar mills in Tamil Nadu A moderate lengthy period was deemed necessary to

arrive at meaningful and purposeful inferences

Navaneetha Kannan (2009)81

The study confines itself to ldquoIssues relating to the

Financial Performance of MRK Cooperative Sugar Mill Ltdrdquo Sethiyathope Cuddulore

District The prime objective of study is to identify and measure financial status of selected

sugar mill The collected data have been analyzed and interoperated as intelligible as

possible to high light diverge activities related to the financial status of the selected sugar

mill ltd The researcher analyses the financial performance using ratio analysis and

Altman`s score

James A Schmitz and Benjamin Bridgman (2009)82

study the US sugar

manufacturing cartel that was created during the New Deal This was a legal-cartel that

lasted 40 years (1934-74) As a legal-cartel the industry was assured widespread

adherence to domestic and import sales quotas (given it had access to government

80

DrVDheenadhayalan amp Ms RDevianbarasi (2009) bdquoRelationship Between Liquidity and Profitability‟

Indian Cooperative Review 2009 pp 39 ndash 42 81

VNavaneetha Kannan(2009) bdquoFinancial Status of Co-operative Sugar Mill A Micro Study‟ Southern

Economist September 2009 pp15-17 82

James A Schmitz and Benjamin Bridgman (2009) The Economic Performance of Cartels Evidence

from the New Deal US Sugar Manufacturing Cartel Federal Reserve Bank of Minneapolis Staff

Report 437


43

enforcement powers) But it also meant accepting government-sponsored cartel-

provisions These provisions significantly distorted production at each factory and also

where the industry was located These distortions were reflected in for example a

declining industry recovery rate that is the pounds of white sugar produced per ton of

beets It declined from about 310 pounds in 1934 to 240 pounds in 1974 The cartel

provisions also distorted the location of industry For example it kept production in

California and the Far West Since the cartel ended in 1974 Californias share of sugar

production has dropped dramatically

Jayantilal B Patel (2009)83

studies ldquoSugar Scenario in India economic Scenariordquo

sugarcane price sugar price cane development activities co-product development

decontrol of the sugar Industry Co-operative sector of sugar Industry National Federation of

Sugar Factories The researcher suggested that recommendations of expert group on sugar

industry The efficiency awards in various fields of sugar production has encouraged many

Co-operative sugar factories to achieve excellence

Anuradha Rajendran (2009)84

studied ldquoPerformance Appraisal of Private Sector

Sugar Companies in Tamil Nadurdquo The researcher undertook seven private sector sugar

industries for his study Mean Co-efficient of variation T-test Correlation Multiple

Regression Stepwise Regression and Path analysis are statistical tools used for his analysis

The main objectives is to determine profitability of selected industry and analysis the

financial performance and growth analysis The researcher gives suggestion for further

development and growth of selected sugar industries

Lakshmipathi RajuM and Suryanarayana Raju (2010)85

studied the sugar

production and consumption in leading countries in the world sugar cane production sugar

production the number of sugar mills operating in cooperative sector and private sector

sugar recovery in India This study highlights the reasons for high ups and downs in cane

production sugar production the number of sugar mills that carried sugar production and

made suggestions for stability in production of cane and sugar

83

Jayantilal B Patel (2009) bdquoSugar Scenario in India‟ The co-operator October 2009 pp133-137 84

Anuradha Rajendran (2009) ldquoPerformance Appraisal of Private Sector Sugar Companies in Tamil

Nadurdquo PhD thesis Bharathiyar University May 2009 85

Lakshmipathi RajuM and Suryanarayana Raju (2010)acutePerformance of sugar industry in India‟ Southern

Economist May 2010 pp 49-54


44

Navaneetha Kannan and Sakthivel Murugan (2010)86

studied on ldquoSugar

Industry in Global Perspectiverdquo The main objectives are to analyze Indian sugar

industries from a global perspective and to evaluate future dimension of Indian sugar

industry It can be observed that there is a growth trend in the sugar production During

the period 2010 it can be seen that per capital consumption has gone upto 20 kgs India‟s

total sugar exports also gone up (3298 million tones) and this is a healthy condition for

the country

Thirupathy (2010)87

Studies ldquoFinancial Performance of Selected Sugar

Companies in Tamil Nadurdquo The researcher‟s main objectives of his study is to examine

long-term and short-term financial solvency profitability and growth performance of

sugar industry in Tamil Nadu to measure the impact of utilization of assets on the

profitability of sugar Industry The present study considers four private sector sugar

companies in Tamil NaduThe study concludes that low sugar recovery percentage was

most serious problem faced by sugar industries

Amit Kumar Dwivedi (2010)88

study on ldquoAn Empirical Study on Gur (Jaggery)

Industryrdquois a natural traditional product of sugarcane It can define as a honey brown

coloured raw lump of sugar Kushinagar has large number of Gur manufacturing units

mostly located in the rural areas and the manufacturers are following conventional

methods for producing this In the district the major clusters which are having more

numbers of manufacturing units are Sukraouli Kasia Hata and Padarauna Around half

of the rural population is employed in gur making industry in this region Although there

is number of R amp D assistance and marketing institutions for support It is found that the

manufacturers are producing majorly for distilleries and local liquor producers not for

the food plate or common man‟s consumption The study examines the cost-return

analysis profitability and operational efficiency of Gur manufacturing units in study area

86

Navaneetha Kannan and Sakthivel Murugan (2010) ldquoSugar Industry in Global Perspectiverdquo Southern

Economist May 2010 pp35-36 87

Thirupathy (2010) ldquoAn Analysis of Financial Performance of Selected Private Sector Sugar Companies

In Tamil Nadurdquo PhD thesis Bharathiyar University July 2010 88

Amit Kumar Dwivedi (2010) ldquoAn Empirical Study on Gur (Jaggery) Industryrdquo (With Special Reference to

Operational Efficiency amp Profitability Measurement) Indian Institute of Management Working

pp2010-12-03


45

The study revealed that units of medium and large sizes were able to cover their

operating expenses with significant level of profit but small size units were earning a

marginal profit The profit earned by this category was very low as compared to other

two sizes The manufacturers are not interested in any new product of Gur they just want

to earn more profit through Gur only This research will urged the policymakers to

streamline strategies that promote stabilization of sugarcane economy and make the

nation credible supplier of Gur in the International Market benefiting Gur makers

sugarcane growers and related stakeholders

Ali Muhammed Khusik (2011)89

A study was conducted at technology transfer

Institute Tandojam Pakistan during 2008-09 to analyse sugar industry competitiveness

in Pakistan For this purpose data were collected both primary and secondary sources

The primary data were collected from sugarcane growers and sugar industry using a well

structured pre-tested questionnaire from Sindh Punjab and NWFP (Khyber Pakhtunkhwa)

Secondary data were collected from published annual reports of Pakistan Sugar Mills

Association (PSMA) The results show that in sindh 50 percent sugar industry falls in large

size group In Punjab a major portion of sugar industry (70) also falls in large size

group while sugar industry of NWFP falls in small size group In Punjab and NWFP

76 and 70 percent small size growers having less than 6 hectares Whereas in Sindh

49 percent are small growers The competitiveness of sugar industry indicates that sugar

industry of Punjab had the advantage of total quantity of sugar production

Reddy (2011)90

studied Sugar and cane prices in India are highly regulated as a

result free market prices in India are showing rising trend with high volatility There is a

possibility of long run shortage of sugar in international markets due to diversion of cane

to produce ethanol and also reduction of domestic support as committed under WTO

regime Suppressed Minimum Support Price (MSP) stagnation in productivity of cane

obsolete technologies and low capacity utilization hindered long-term perspective

To balance small-scale farming economies of scale in mills there is a need for reducing

89

Ali Muhammed Khusik Asiam Memom and Ikram Saeed (2011)rdquo Analysis of Sugar Industry

Competitiveness In Pakistanrdquo J Agri Res 201149(1) 90

Amarender A Reddy (2011) Sugar and Cane Pricing and Regulation in India International Sugar Journal

Vol 113 No 1352 pp 548-556 August 2011


46

cost of production and processing of cane A formula based Fair and Remunerative Price

(FRP) is suggested for cane to take into account both cost of production and international

price realities along with complete freeing of sugar prices Further for better price

discovery in domestic markets de-control of sugar prices should be accompanied by

re-introduction of futures market to reduce price volatility


study on ldquoThe Determinants of Profitability An Empirical

Investigation Using Indian Automobile Industryrdquo The profit of a business may be

measured by studying the profitability of investment in it It is the test of efficiency

powerful motivational factor and the measure of control in any business Profitability is

highly sensitive economic variable which is affected by host of factors operating through

a variety of ways The objective of this study is to examine the determinants of

profitability of selected Automobile Industry Determinants of profitability are analyzed

using the techniques of ordinary least squares It is evident from the results that size is the

strongest determinants of profitability of Indian Automobile Industry followed by the

variables vertical integration past profitability growth rate of assets and inventory

turnover ratio The study concluded that industry should consider all these possible

determinants while considering its profitability

Santimoy Patra (2011)92 study on public sector and private sector in the Indian

economic structure public sector units were considered to be the main engine of growth

and accordingly many areas were reserved for public sector with few exceptions But

after a long period of operation the functioning of public sector units in the matter of

utilization of public money began to be questioned As a result in the new industrial

policy of 1991 the thrust of industrialization has been shifted from nationalization to

privatization and many areas were opened to the private sector with a view to initiating

healthy competition between the public sector and private sector which in turn might

lead to the economic progress of the country In this backdrop the author has found it

91

Vijayakumar (2011) ldquoThe Determinants of Profitability An Empirical Investigation Using Indian

Automobile Industryrdquo International Journal of Research in Commerce amp Management volume No 2

(2011) Issue No 9 (September) ISSN 0976-2183 92

Santimoy Patra (2011) A Comparative Study of Return on Investment of Selected Public Sector And

Private Sector Companies In India International Journal Of Research In Commerce Economics amp

Management Volume No 1 (2011) Issue No 8 (December) ISSN 2231-4245


47

necessary to judge the capacity of earning reasonable return by effective investment and

optimum utilization of procured funds on the part of selected public sector and private

sector units Hence an attempt has been made in this study to make a comparative study

of financial performance based on ROI of some selected public sector and private sector

companies belonging to the steel industry in India being one of the pillar sectors of Indian

economy The study has found that on average the private sector companies achieved

relatively better performance from the view point of earning return and maintaining

consistency than the public sector companies Some measures have also been suggested

in this study to uplift the performance of public sector companies

Sathya (2012)93

studied on ldquoAnalysis of Composite Profitability Index of the

Cement Companies in Indiardquo The return of a business may be measured by studying the

profitability of investment in it Profitability may be defined as the ability of given

investment to earn a return from its use This study based on the secondary data from a

sample of 30 cement companies the study attempts to measure the composite

profitability of a firm by a single index The analysis shows that in order to rank the

selected companies in terms composite profitability ratio-wise scores have been

aggregated and the firm getting the highest total score has been ranked as 1 and the firm

securing the lowest total score has been ranked as 30

Martina Noronha and Dilipsinh Thakor (2012)94 studied on The Indian Sugar

Industry is marked by co-existence of different ownership and management structures

At one extreme there are privately owned sugar mills in Uttar Pradesh that procure

sugarcane from nearby cane growers At the other extreme are cooperative factories owned

and managed jointly by farmer This study attempts to find the financial viability of sugar

factories located in South Gujarat in India It uses ratio analysis and discriminate analysis to

give the actual prediction equation to classify new cases There is tremendous scope for India to

emerge as a significant player in the world sugar trade (milling and overheads) improvement

If we can make a fair degree of progress on agricultural efficiency (per hectare output of sugar

93

Sathya (2012) ldquoAnalysis of Composite Profitability Index of the Cement Companies in Indiardquo Zenith

International Journal of Business Economics amp Management Research Vol2 Issue 1 January 2012

ISSN 2249 8826 94

Martina R Noronha and Dilipsinh thakor (2012) Financial Viability of Sugar Factories in South

Gujarat-A Case StudyInternational Journal of Multidisciplinary Research Vol2 Issue 2 February

2012 ISSN 2231 5780


48

and cost of production) as well as conversion efficiency India will surely become a major

exporter which will stabilize the industry and reduce its cyclicality significantly as well as open

up new vistas of growth for the Indian Sugar Industry An efficient and well managed future

trading mechanism needs to be put in place to facilitate price discovering both for farmers and

millers both in the domestic and global markets

Conclusion

From the above reviews of the empirical work it is clear that different authors

have approached analysis in different ways in varying levels of analysis These different

approaches helped in the emergence of more and more literature on the subject over the

time It gives an idea on existence and diverse works on profitability It has been noticed

that the studies on profitability in various sector provide divergent result for the period of

study The main reason for diversion in the results is the difference in methods used for

the measurement of factors like profitability liquidity etc

All the studies arrived at analyzing profitability performance with number of

factors it facilities to understand the various structural and non-structural variables that

determine profitability It has been notified that the study on the profitability analysis in

various industries used the variables such as sellers concentration advertising intensity

economies of scale leverage profit variability firm growth and size similarly few studies

approached which used the quantum of sales return on investment and appropriation of

profit on investment and appropriation of profit to explore the profit variation of the

industries

Survey of the existing literature indicates that no specific study has been carried

on to examine the profitability analysis of selected private sector sugar mills in Tamil Nadu

The present study is an attempt towards this direction and therefore aims to enrich the

literature of profitability relating to private sector sugar industry Further the study is

intended to employ different sophisticated statistical techniques before qualifying and

any aspects of profitability for wider acceptability and appreciation


16

Ramesh (1980)2 stated that the sugar industry in India is the second largest

processing industry in the country next only to textile There are 320 factories producing

annually 6570 lakh tonnes of sugar The aggregate assets of the industry are more than

Rs 1300 crores About 30 million cultivators are engaged in growing sugarcane and

supplying the same to sugar factories The Sugar Industry disburses about Rs 800 crores

annually towards the sugarcane price It contributes more than Rs 300 crores annually to

state and central exchequers The factories are ideally suited for faster rural socio-

economic development The prosperity of the sugar industry is therefore closely linked

with the development and prosperity of our vast population residing in the villages

Shah and Shah (1980)3 pointed out that the cost of production of sugar factory

depends primary on the raw materials the sugar recovery percentage and the duration of

crushing season They suggested that the cost of sugar production can be brought down

by utilizing the processing unit for a maximum period the proper checking of the machinery

of its day to day work the cost of extra fuel lubricants spare parts consumption of

chemicals and sugar content in final molasses would be reduced if the steam balance

and machinery maintained proper plans and proper watch in clarification and boiling

house stations

Murali (1980)4 suggested that break-even analysis is an important aspect for proper

planning of sugar industry and controlling its profits It helps in determining

Minimum level of operation required to avoid losses

Volume of sale to be undertaken to achieve a profit target

The effect of change in price change in fixed costs change in variable cost and change in

volume of sales on profit and

Assessment of the proportion and sales mix to maximize profits

Manohar Rao (1980)5 rightly pointed out that the current international prices of

sugar and molasses every sugar producing country has a strong reason to convert sugarcane

2 Ramesh NA (1980)Adjudication of the Performance of Sugar Factoriesrdquo Maharashtra Sugar 6(4)1980

pp47 3 Shah HPand Shah NK ldquoMeasures for Reduction in Cost of Production of Sugarrdquo Gujarat Association

for Agricultural Science 1980 4 Murali P (1980) ldquoSugar Industry Planning and Controlling Profilesrdquo Maharashtra Sugar 5(5)pp39


17
































University of Poona


18











Sharma (1981)10




planting




Hapse (1982)11















19

Gangadhar (1982)12















Kohak (1983)14














12







20

Agarwal (1983)15






























15




1989 pp329 17


March pp3


21





















Mukerjee (1986)19










18






22




















Kharche (1987)22











20








23































23







24




Verma (1989)26


























26






pp 477-483


25




regular basis










industries
















29








26






























32








27














carrying costs
















liquidity

35





28












Gangadhar (1997)38


















37








29



Agarwal (1999)40









Sahu (2000)41

















40








30

Rajeswari (2000)43









Srinivasan (2001)44








Jadhaw (2001)45












energy

43







31






























46





June 2001 pp8-14 48






32































50








33





























54





pp 032002 56



Source WwwSsrnCom


34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








17
































University of Poona


18











Sharma (1981)10




planting




Hapse (1982)11















19

Gangadhar (1982)12















Kohak (1983)14














12







20

Agarwal (1983)15






























15




1989 pp329 17


March pp3


21





















Mukerjee (1986)19










18






22




















Kharche (1987)22











20








23































23







24




Verma (1989)26


























26






pp 477-483


25




regular basis










industries
















29








26






























32








27














carrying costs
















liquidity

35





28












Gangadhar (1997)38


















37








29



Agarwal (1999)40









Sahu (2000)41

















40








30

Rajeswari (2000)43









Srinivasan (2001)44








Jadhaw (2001)45












energy

43







31






























46





June 2001 pp8-14 48






32































50








33





























54





pp 032002 56



Source WwwSsrnCom


34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








18











Sharma (1981)10




planting




Hapse (1982)11















19

Gangadhar (1982)12















Kohak (1983)14














12







20

Agarwal (1983)15






























15




1989 pp329 17


March pp3


21





















Mukerjee (1986)19










18






22




















Kharche (1987)22











20








23































23







24




Verma (1989)26


























26






pp 477-483


25




regular basis










industries
















29








26






























32








27














carrying costs
















liquidity

35





28












Gangadhar (1997)38


















37








29



Agarwal (1999)40









Sahu (2000)41

















40








30

Rajeswari (2000)43









Srinivasan (2001)44








Jadhaw (2001)45












energy

43







31






























46





June 2001 pp8-14 48






32































50








33





























54





pp 032002 56



Source WwwSsrnCom


34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








19

Gangadhar (1982)12















Kohak (1983)14














12







20

Agarwal (1983)15






























15




1989 pp329 17


March pp3


21





















Mukerjee (1986)19










18






22




















Kharche (1987)22











20








23































23







24




Verma (1989)26


























26






pp 477-483


25




regular basis










industries
















29








26






























32








27














carrying costs
















liquidity

35





28












Gangadhar (1997)38


















37








29



Agarwal (1999)40









Sahu (2000)41

















40








30

Rajeswari (2000)43









Srinivasan (2001)44








Jadhaw (2001)45












energy

43







31






























46





June 2001 pp8-14 48






32































50








33





























54





pp 032002 56



Source WwwSsrnCom


34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








20

Agarwal (1983)15






























15




1989 pp329 17


March pp3


21





















Mukerjee (1986)19










18






22




















Kharche (1987)22











20








23































23







24




Verma (1989)26


























26






pp 477-483


25




regular basis










industries
















29








26






























32








27














carrying costs
















liquidity

35





28












Gangadhar (1997)38


















37








29



Agarwal (1999)40









Sahu (2000)41

















40








30

Rajeswari (2000)43









Srinivasan (2001)44








Jadhaw (2001)45












energy

43







31






























46





June 2001 pp8-14 48






32































50








33





























54





pp 032002 56



Source WwwSsrnCom


34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








21





















Mukerjee (1986)19










18






22




















Kharche (1987)22











20








23































23







24




Verma (1989)26


























26






pp 477-483


25




regular basis










industries
















29








26






























32








27














carrying costs
















liquidity

35





28












Gangadhar (1997)38


















37








29



Agarwal (1999)40









Sahu (2000)41

















40








30

Rajeswari (2000)43









Srinivasan (2001)44








Jadhaw (2001)45












energy

43







31






























46





June 2001 pp8-14 48






32































50








33





























54





pp 032002 56



Source WwwSsrnCom


34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








22




















Kharche (1987)22











20








23































23







24




Verma (1989)26


























26






pp 477-483


25




regular basis










industries
















29








26






























32








27














carrying costs
















liquidity

35





28












Gangadhar (1997)38


















37








29



Agarwal (1999)40









Sahu (2000)41

















40








30

Rajeswari (2000)43









Srinivasan (2001)44








Jadhaw (2001)45












energy

43







31






























46





June 2001 pp8-14 48






32































50








33





























54





pp 032002 56



Source WwwSsrnCom


34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








23































23







24




Verma (1989)26


























26






pp 477-483


25




regular basis










industries
















29








26






























32








27














carrying costs
















liquidity

35





28












Gangadhar (1997)38


















37








29



Agarwal (1999)40









Sahu (2000)41

















40








30

Rajeswari (2000)43









Srinivasan (2001)44








Jadhaw (2001)45












energy

43







31






























46





June 2001 pp8-14 48






32































50








33





























54





pp 032002 56



Source WwwSsrnCom


34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








24




Verma (1989)26


























26






pp 477-483


25




regular basis










industries
















29








26






























32








27














carrying costs
















liquidity

35





28












Gangadhar (1997)38


















37








29



Agarwal (1999)40









Sahu (2000)41

















40








30

Rajeswari (2000)43









Srinivasan (2001)44








Jadhaw (2001)45












energy

43







31






























46





June 2001 pp8-14 48






32































50








33





























54





pp 032002 56



Source WwwSsrnCom


34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








25




regular basis










industries
















29








26






























32








27














carrying costs
















liquidity

35





28












Gangadhar (1997)38


















37








29



Agarwal (1999)40









Sahu (2000)41

















40








30

Rajeswari (2000)43









Srinivasan (2001)44








Jadhaw (2001)45












energy

43







31






























46





June 2001 pp8-14 48






32































50








33





























54





pp 032002 56



Source WwwSsrnCom


34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








26






























32








27














carrying costs
















liquidity

35





28












Gangadhar (1997)38


















37








29



Agarwal (1999)40









Sahu (2000)41

















40








30

Rajeswari (2000)43









Srinivasan (2001)44








Jadhaw (2001)45












energy

43







31






























46





June 2001 pp8-14 48






32































50








33





























54





pp 032002 56



Source WwwSsrnCom


34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








27














carrying costs
















liquidity

35





28












Gangadhar (1997)38


















37








29



Agarwal (1999)40









Sahu (2000)41

















40








30

Rajeswari (2000)43









Srinivasan (2001)44








Jadhaw (2001)45












energy

43







31






























46





June 2001 pp8-14 48






32































50








33





























54





pp 032002 56



Source WwwSsrnCom


34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








28












Gangadhar (1997)38


















37








29



Agarwal (1999)40









Sahu (2000)41

















40








30

Rajeswari (2000)43









Srinivasan (2001)44








Jadhaw (2001)45












energy

43







31






























46





June 2001 pp8-14 48






32































50








33





























54





pp 032002 56



Source WwwSsrnCom


34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








29



Agarwal (1999)40









Sahu (2000)41

















40








30

Rajeswari (2000)43









Srinivasan (2001)44








Jadhaw (2001)45












energy

43







31






























46





June 2001 pp8-14 48






32































50








33





























54





pp 032002 56



Source WwwSsrnCom


34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








30

Rajeswari (2000)43









Srinivasan (2001)44








Jadhaw (2001)45












energy

43







31






























46





June 2001 pp8-14 48






32































50








33





























54





pp 032002 56



Source WwwSsrnCom


34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








31






























46





June 2001 pp8-14 48






32































50








33





























54





pp 032002 56



Source WwwSsrnCom


34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








32































50








33





























54





pp 032002 56



Source WwwSsrnCom


34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








33





























54





pp 032002 56



Source WwwSsrnCom


34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








34






















impact on growth

Sirohi (2003)59







57









35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








35














technology
















60








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








36






























63







37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








37






























66






38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








38

Adolphus (2005)68


























had made Study



68








71




39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








39




























72






40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








40

Singh (2007)74




























74









41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








41










Thiyagu (2008)77














capital


study on The




85








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








42

























Altman`s score


study the US sugar




80







Report 437


43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








43

























studied the sugar






83







44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








44








the country

Thirupathy (2010)87




















86







pp2010-12-03


45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








45






















Reddy (2011)90








89




Vol 113 No 1352 pp 548-556 August 2011


46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








46




























91








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








47










Sathya (2012)93



















93



ISSN 2249 8826 94



2012 ISSN 2231 5780


48






Conclusion















industries








48






Conclusion















industries








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