Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in India

Pritpal Singh Bhullar

EN

Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in India

Abstract

The present paper investigates the impact of operating efficiency on firm valuation for two economic sectors FMCG and Pharmaceutical Sectors in India. The study considers 30 Indian firms from the period of 2005 to 2015. To examine the effect, six financial ratios are considered as proxy for operating efficiency and enterprise value as proxy for Firm value. We employ Panel data analysis to explore the relationship of dependent and independent variable. The results report that Fixed Asset Turnover Ratio (FATO) and Net Profit Margin (NPM) indicates negative relation with Enterprise Value (EV) in Pharmaceutical sector and EV/Sales and Fixed Asset Turnover Ratio (FATO) confirms negative relation with EV for FMCG Sector. The empirical results will act as guidelines for the valuation analysts for implication of new valuation variables by replacing conventional variables. Moreover, the study implies that value creation is more significant to current performance as compared to past performance.

Keywords

Operating Efficiency, Panel Data, Enterprise Value, Fast Moving Consumer Goods and Pharmaceutical Sector

Details

Primary Language

English

Subjects

-

Journal Section

-

Authors

Pritpal Singh Bhullar This is me

Publication Date

September 1, 2017

Submission Date

September 1, 2017

Acceptance Date

-

Published in Issue

Year 2017 Volume: 7 Number: 3

IZ

https://izlik.org/JA68KJ38AX

Cite

RIS / Bibtex

APA

Bhullar, P. S. (2017). Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in India. International Journal of Economics and Financial Issues, 7(3), 671-675. https://izlik.org/JA68KJ38AX

AMA

1.Bhullar PS. Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in India. IJEFI. 2017;7(3):671-675. https://izlik.org/JA68KJ38AX

Chicago

Bhullar, Pritpal Singh. 2017. “Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in India”. International Journal of Economics and Financial Issues 7 (3): 671-75. https://izlik.org/JA68KJ38AX.

EndNote

Bhullar PS (September 1, 2017) Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in India. International Journal of Economics and Financial Issues 7 3 671–675.

IEEE

[1]P. S. Bhullar, “Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in India”, IJEFI, vol. 7, no. 3, pp. 671–675, Sept. 2017, [Online]. Available: https://izlik.org/JA68KJ38AX

ISNAD

Bhullar, Pritpal Singh. “Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in India”. International Journal of Economics and Financial Issues 7/3 (September 1, 2017): 671-675. https://izlik.org/JA68KJ38AX.

JAMA

1.Bhullar PS. Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in India. IJEFI. 2017;7:671–675.

MLA

Bhullar, Pritpal Singh. “Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in India”. International Journal of Economics and Financial Issues, vol. 7, no. 3, Sept. 2017, pp. 671-5, https://izlik.org/JA68KJ38AX.

Vancouver

1.Pritpal Singh Bhullar. Empirical Analysis of Operating Efficiency and Firm Value: A Study of Fast Moving Consumer Goods and Pharmaceutical Sector in India. IJEFI [Internet]. 2017 Sep. 1;7(3):671-5. Available from: https://izlik.org/JA68KJ38AX