CHAPTER-II

REVIEW OF LITERATURE

2.1 INTRODUCTION

The review of literature guides the researchers for getting better understanding

of methodology used, limitations of various available estimation procedures and data

base and lucid interpretation and reconciliation of the conflicting results. Besides this

the review of empirical studies explores the avenues for future and present research

efforts related with the subject matter. 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 have been carried out on different aspects

of the working of public and private sector by the researchers, economists and

academicians in India. Different authors have analyzed financial performance in

different perspective.

A review of these analyses is important in order to develop an approach that

can be employed in the context of the study of selected Indian Public Sector

Manufacturing Enterprises viz. Steel, Minerals and Metals, Coal and Lignite, Power,

Petroleum and Chemicals and Pharmaceuticals. Therefore, the present chapter reviews

the various approaches to the study on financial analysis and performance.

17
2.2 INDIAN AND FOREIGN STUDIES

Rammohan Rao & et.al (1975)1 in this study how far the capital markets in

India were competitive. Their study examined the decisions about internal and

external finance as interrelated and consequent upon a choice of the structure of

current and fixed assets. Secondly, they analyzed the earnings pattern of different

types of funds to see if the competitiveness hypothesis can sustain.

They concluded that a firms ability to borrow was constrained by the rise

associated with the proportion of debt in the capital structure. If the ratio was high

then internal funds improved the firms ability to borrow. Similarly if the financial

leverage (Debt or equity ratio) was lower than the institutionally determined leverage.

The borrowing was facilitated. But if the leverage was the institutionally determined

maximum then borrowing was inhibited.

Vasanthamani (1982)2 in her study The Financial Performance of

Lakshmi Machine Works Limited. The objective of the study was to analyze the

financial performance of Lakshmi machine work with a view to analyze the future of

performance potentials. The study covered the period from 1978-1982. The liquidity

position of the company showed that the company was able to meet the creditors out

of its own current assets. The quick ratio also revealed that the quick liabilities were

met at of quick assets without any difficulty.

Altman (1989)3 in his A Study on Financial Risk Management in Textile

Industry in India for a period of ten years from 1978-1988. The objective of the

study was to find the structure and utilization of financial risk management in textile

18
mills. Around twenty mills were taken for study. The findings of the study were total

investment in all selected textile units showings increasing trend. The conclusion was

blacked amount of cash in current assets was utilized at right time to purchase the

inventory.

Rajeswary (1990)4 in her study entitled Financial Performance of Precot

Mills Limited has concluded that the financial position and operating efficiency of

the company was satisfactory where as the margin or safely was not stable solvency

position was not satisfactory and the earning capacity was minimum.

Parvathi (1990)5 in her Financial Performance Analysis Hindustan

Photos Films Ooty for the year 1990-1996,concluded that the gross profit has shown

as increasing trends, long term solvency of the company, debt equity ratio was not

satisfactory

Sankar.T.L & et.al (1995)6 in their study entitled, Financial Performance

of State Level Public Enterprises suffers from staggering investment, poor

profitability, unnecessary investment, poor project planning and inadequate financial

control.

Kim & et.al (1996)7 in Profitability, growth and risk (optimization), an attempt

was made to understand the profitability differentials in terms of simultaneously

determined inter-relational among profitability, growth and risk. The variables are

endogenous in firm profit maximization.

19
 Gnanavelu.N (1996)8 in his study entitled Case Study of Financial

Performance of Sakthi Sugars Limited has proved the financial performance of the

company passion is good. The borrowing by the company was kept at the minimum

level its profitability was expected to increase further. Being the row material in

seasonal the fluctuation in working capital cannot be avoided.

Roger M. Shelor & et.al (1998)9 .This study examines changes in Operating

Performance Among Real Estate Investment Trusts following an initial public

offering (IPO). The purpose is to determine whether there is an enhancement in the

value of the underlying asset that is related to the IPO. We separately analyze equity,

mortgage and diversified REITs. We also compare the operating performance of

recent IPOs to those of earlier years to address the impact of the 1993 Revenue

Reconciliation Act on institutional investors demand for REIT stock. Unlike previous

analyses of industrial firms, REITs were found to have significant increases in return

on Assets and selected measures of financial performance. The post-IPO cumulative

stock price decline and recovery is illustrated.

Pandey.I.M & et.al (1998)10 in their study, Financial Ratio Pattern In

Indian Manufacturing Companies they observed a declining trend in profitability

relation to shareholders equity and total investment, whose impact had been deepened

by the increasing interest burden.

Rajalaksmi (1998)11 in his study Financial Performance of Raghupathy

Machine Works Limited. The objective of this study was to evaluate the financial

performance of Raghupathy machine works with a view to analyze the future of

20
performance potentials. The study covered the period from 1982- 1998.The liquidity

position of the company showed that the company was able to meet the creditors out

of its own current assets. The quick ratio also revealed that the quick liabilities were

met at quick assets without any difficulty.

Sardeesh Babu (1999)12 in her study A Study on Financial Performance of

Fertilizers and Chemicals Travancore Limited .The cost on various overheads can

be brought down by carefully scrutinizing each item and applying cost cutting

techniques. The profitability of the company can be improved by reducing the

expenses that do not contribute any productive use. The current assets can be managed

efficiently by examining the material holding and stock holding procedure and pattern.

If the company increase its turnover and reduces its cost, the profit will increase

leading to an increases in the growth rate of sales, profit before tax and profit after tax.

Mohammed Rafiqul Islam (2000)13 Studied the profitability of

Fertilizer Industry in Bangaladesh from 1985 1986 to 1994 1995. The

sample included fire fertilizer interstices in Bangladesh chemical industries

corporation (BCIC). The findings of the study indicated that none of the

selected units were consistent and all the units were plagued with declining

profits. The study concluded with suggestions for improvement of the

profitability of fertilizer industry in Bangladesh.

Shergill G.S et.al (2000)14 examined the market structure and financial

control. They found that there was negative relationship exists between concentration

to profitability, profitability to capital intensity due to ideal capital and a positive

21
relationship observe between risk and profitability due to efficient management, an

ideal management seeks to achieve high profitability with low variation of earning.

MD Shan Alam (2001)15 analysed the cost and profitability of a public

sector paper mill. The study suggests that the monthly variance of material used,

labour costs and overheads expenditure should be prepared to control cost and

improve profitability.

Anil Kumar (2000) 16 in his study on Financial Performance of Hindustan

Motors Limited, Cochin, in his study found that the sales of the company were

showing an upward trend which reflected a growth in its profit. The tools use by him

were ratio analysis, the companys financial position is favorable

Karthikeyan (2000)17 Financial performance of selected automobile

companies, An analytical Study tried to identify the relationship between the

financial performance variables and to develop simple financial forecasting

performance variables are analyzed to forecast the financial performance a simple

cross-section regression analysis was made. The financial analysis variables

considered were net sales, total assets, Gross profit, Profit before tax, Dividend,

Retained earnings, Cash flows and Net worth. He concluded that the sales have been

consistent in all the four year of study. Total asset have also been consistent in four

years under the study.

Mohammed Rafiqul Islam (2000)18 in this study The Profitability of

Fertilizer Industry in Bangladesh. The findings of the study indicate that none of

these selected units were plagued with profit.

22
 Sahu (2002)19 A simplified model for liquidity analysis of paper

companies in his analysis identified the effective of Liquidity Management with

usefulness and develops a simple model for current and quick ratios of 12 Indian

paper companies for the period of 1989 1990 to 1996 1997. This study revealed

the effective management of liquidity in the paper companies.

Padmaja Manoharan (2002)20 through the analytical study on Profitability

of Cement Industry in India has revealed the variation in profitability of Indian

cement companies depending on age, size and region. The study identified that quality

of earning depends on management and leverage management. Further, the analysis

concludes that the profitability and quality of earnings is influenced by the liquidity

factor.

Dr. Singh P.K. (2002)21 examined the working capital management of

Lupin Laboratories Ltd from the year 1995 1996 to 2001 2002, objective of the

study were (i) to assess the significances of working capital (ii) to identify the

elements responsible for changes in working capital and (iii) to study liquidity

position of the company the researcher observed position was very much satisfactory

and the increase in operations cycle indicated that there was a proper utilization of

working capital. He concluded that the companys overall working position was

satisfactory and it was suggested that the debt collection policy was to be improved

Lilach Nachum (2002)22 in this study related to The CBR Research

Program on Industrial Organisation, Competitive Strategy and Business

Performance. this study was inspired by the observation that foreign financial

23
service firms operating in the city of London do not suffer the liability of foreignness

to the extent suggested by theory, to examine the reasons for this departure from

theory, the study advances a theoretical framework that distinguishes between three

types of Advantages that together account for the competitive performance of MNEs

relative to that of indigenous firms. Empirical analyses of a sample of two hundred

and ninety six foreign financial service firms in the city of London shows that in this

particular context major sources of competitive performance are the firm-specific

advantage and the advantages of multinational, where British firms may not

necessarily possess an advantage over foreign firms. An examination of the validity of

the findings, in order to access the extent to which situation is unique to the city of

London or rather signifies a more general trend that requires theoretical modifications

and extensions, is emphasized as a major task for future research.

Ashita Raveendran (2003)23 presented a survey of the Financial Structure

and Performance of the Engineering Industry in Kerala. In her survey data of four

engineering groups, namely, metal products, machinery, electrical and transport

products were analysed. She concluded that the liberalized policy should at the

upgradation of the technology, therby improving the quality and productivity of the

engineering industry. Measures for cost control, modernization, upgradation,

computerization and the like. Will help in strengthening the forward and backward

linkages of the engineering industry within the state.

Dr.Sudarsana Reddy. G et.al (2003)24 Examined the Debtors Management of

Andhra Pradesh Paper Industry. The researcher undertook a Sample size of six

mills during 1989- 1990 to 1998 -1999. They objective that the sample mills adopted a

24
liberal credit policy, size of trade debtors as a percentage of current assets shown a

declining trends but the collection period of debtors were showily increased which

revealed the slackness in collection efforts of the mills. They suggested that the aging

scheduled of dues to be prepared at frequent interval like quarterly, half, yearly and

monthly to frame appropriated dept policy.

Shanmugam and Bhaduri Samitra (2003)25 in their study analysed 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 statistics 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.

Dr. Khatik SK and Ruadeep Kumar Singh (2003)26 have undertaken a case

study about the liquidity management of eicher ltd. Mandideep Bhopal. The

objective of the study were (i) to assess the significance of current ratio, acid test ratio

(ii) to examine and evaluate the liquidity position during 95- 96 to 98 -99. The

researchers observed that the short term liquidity position was not stable but

management of inventory and working capital were satisfactory. The company was

suggested to concentrate on management of current assets and debtors collection

period to improve their liquidity position.

25
 Satyanarayana chary and Venkateshwarlu (2003)27 in their study made an

attempt to examine to need, sources, components, estimation of working capital and

its impact on profitability with special reference to Sri Venkata Narasimha solvent oils

limited for the period of six years from 1996 1997 to 2001 to 2002. the result

showed that the company has not utilized its long term funds more effectively by

investing them in fixed assets, impact of working capital and profitability ratios

showed completely positive impact over the study period the study suggested that

correct estimation of working capital should be made and fluctuation in quantum of

working capital in relation to sales should be avoided.

Luiz Fernando Rodrigues de Paula (2003)28 in this study This Paper Sets

out To Analyze The Statements of Recent Foreign Bank Investments In The

Brazillian Retail Banking Market And The Strategies of The Major European

Banks In Brazil. Since the recent wave of banking internationalization, financial

institutions have continued to pursue their existing relationships while seeking greater

integration into local markets. The recent influx of European banks into Latin

America and Brazil, meanwhile, has been due to a varied range of factors, including

bank restructuring in Europe, the dynamic of internationalization in the Spanish

banking system and the process of market deregulation in the region. The paper also

stresses some common and specific features of the major European banks in Brazil.

One common feature is that they are large universal banks which have chosen to

develop abroad as a business expansion strategy.

26
 Christopher J.Green (2003)29, in this paper, Investigate the Efficiency of

Banks in Central and Eastern Europe. The aim is to evaluate whether foreign-

owned banks are more efficient than domestic banks and can therefore play a key role

in energizing the emerging financial systems in transition economics. Our measures of

efficiency are based on standard microeconomic theory. Using a panel of 273 foreign

and domestic banks located in Bulgaria, Coratia, the Czech Republic, Estonia,

Hungary, Lativa, Lithuania. Poland and Romania for the period 1995-1999, we

estimate a system of equations, consisting of an augmented translog cost function and

two cost shares.

Anshan Lakshmi (2003)30 made A Study of The Financial Performance

With Reference To Steel Industries Kerala Ltd. This study covered from 1977-

1998 to 2001-2002, the objectives of the study was to analyze and evaluate the

working capital management, to analyze the liquidity position of the company, to

evaluate the receivables, payables and cash management and to suggest ways and

means to improve the present date of working capital. The major tools used for the

analysis say that the working capital management was every author suggested that the

inventory management have to be corrected.

Santany Kumar Ghosh & et.al (2003)31 in this paper, Utilization of

Current Asset and Operating Profitability and an Empirical Study on Cement

and Tea Industries in India. The study concluded that the degree of current asset in

positive associated with the operating profitability of the firm.

27
 Ghosh and Maji (2004)32 examined the efficiency of working capital

management of Indian cement companies from 1992- 1993 to 2001 2002 instead

of using the common method of analyzing different working capital management

ratios, three index values representing the average performance of the components of

current assets, the degree of utilization of the total current assets relation to sales and

efficient in managing the working capital have been computed for the selected. firms

over the ten year study period

Hamsalakshmi and Manickam (2004)33 has made A study on financial

performance analysts of selected software companies The study has been focused

on examining the structure of liquidity position leverage and profitability. The study

has revealed a favorable liquidity position and working capital position. The study has

also pointed out that the companies rely more on internal financing and the overall

profitability has been increasing at a moderate rate.

Bardia (2004)34 in the study on Liquidity and Management A case study

of Steel Authority of India Limited analysed the management of liquidity position

of Steel Authority of India Limited, one of the largest public sector steel

manufacturing companies of India for the period 1991-92 to 2001-02. The study

assessed the liquidity maintained by the steel giant and examined the liquidity position

of the company based on some important parameters mainly employed for measuring

liquidity. The study has applied comprehensive rank test for comparing the liquidity

position of the company. Spearmans rank correlation has been applied to extent of

relationship between liquidity and profitability. The study concluded that the liquidity

and profitability more in the same direction and Spearmans rank correlation co-

28
efficient and students t test showed a significant positive association between

liquidity and profitability of the company during the period under study.

Narware (2004)35 in his study on Working Capital and Profitability an

Empirical Analysis, has examined the interrelationship between profitability and

working capital with the assistance of ratio analysis. He has also employed correlation

analysis between selected ratios relating to working capital management and ROI,

multiple regression analysis has been employed to ascertain the impact of working

capital and profitability. His analysis revealed that working capital management and

profitability disclosed both negative and positive association.

Narware and Vivek Sharma (2004)36 in their study on Liquidity Management

of Hindustan Petroleum Corp. Ltd analyses the liquidity management during 1995

1996 with the help of selected ratios they concluded that there was in adequacy of

funds due to a high contribution of inventory in current assets.

Clement & et.al (2005)37 in their study on Automobile Purchase: Peer

Influence In Decision Making based on the study the objectives are to analyze the

major factors influencing the purchase to find out the factors influencing peer groups

in the purchase of car by it size to determine the most influencing peer group in the

purchase process. The major findings are most of the sample respondents taken for the

studies were in the age group of 30-40. Peer group Friends are reported as the most

infusing factor for purchase decision brand in able value, publicity and defeats

network after sales service and vehicle performance were found to be significant

factors influencing purchase decision of cars.

29
 Pandey.I.M (2005)38 viewed that the two important aims of the Working

Capital Management and profitability and liquidity solvency refers to the company

ability to meet their obligations. To ensure the solvency, the company should be very

liquid which means large amount of current assets holdings if the company maintain

relatively larger current assets than the requirements, the companys profitability will

suffer to the extent the investment was idle to have higher profitability, the company

had to sacrifice the liquidity company had to sacrifice the liquidity position.

Maintaining these two in the same direction was challenging and difficult task which

the finance manages encounter.

Shanmugam (2006)39 in his study Liquidity Profitability International

ships. A Sectoral Analysis revealed that trend of working capital, overall profitability

ratios, inter-relationships between working capital accounts and selected financial

variables and inter-relationship between liquidity and profitability in Engineering

Industry in India for the period 1991 2000. It concluded that the inter-relationship

between sales and working capital accounts are found to be significant for the

industry.

Dr. Santancy, Dr.ghosh et.al (2006)40 in their study on Impact of Operating

Leverage Profitability of selected Indian Industries examined the Empirical

relationship between the degree of operating leverage and profitability by taking a

sample of 72 companies from four industries namely tea, chemical, paper and

pharmaceutical . they observed that the degree of operating leverage was positively

associated with operating profitability .

30
 Misra D.P and Mishra P.K (2006)41 attempted an empirical study on Factor

Influencing Profitability of Orissa State Warehousing Corporation during 1985

1986 to 2002-2003. the objective were to examine the influences of independent

factor viz growth in size, growth in volume of business, operating cost ratio, leverage

liquidity receivable turnover fixed assets turnover end age on profitability by stepness

regression analysis, they concluded that operating cost ratio, liquidity ratio, fixed

assets turnover ratio. Combined around 97% of the variation towards profitability of

Orissa state warehousing corporation.

Dr.Das P.K (2006)42 examined the Dividend practices in selected Cement

Industries Ltd during 85 -86 to 2004 -2005. He found that the company followed a

conservative dividend policy during the study period. There was significant increase

in profitability due to earnings per share and capital employed current ratio was in

decaling trend.

D. Deep and Umaya Salma Sharahan (2007)43 presented Liquidity

Management of Leading Automobile Study an empirical study on liquidity

management of leading automobile company from 1995 to 2006. The researcher

observed that the liquidity position of the company it was suggested that to utility its

assess in an effective manner increase cash balance and reduce its current liability.

Ramachandra Reddy & et al. (2007)44 in his research work Financial

Performance through Market Value added (MAV) approach. The study has been

made to examine the effect of selected variables as MAV, for the purpose of analysis,

10 cement companies were selected in Andra pradesh.

31
because of its contribution to the industrial output, employment generation and foreign

exchange earnings. One of the earliest to come into existence in India, it accounts for

14 per cent of the total Industrial production, contributes to nearly 30 per cent of the

total exports and is the second largest employment generator after agriculture. Profit

earning is the aim of business. In the course of analysis of this study various Statistical

techniques have been made. The Statistical techniques used are correlation, t-test, and

Multiple Regression analysis to find out the relationship between the variable and to

identify the factor influencing the profitability. Based on the analysis net sales and net

profit have some relationship and working capital management was a highly

influencing factor to find out profitability of selected textile companies in Coimbatore

district. Companies must concentrate with other influencing factor for better profit of

the company.

Tyler Yu & et al. (2009)59 examine Comparative analysis of financial

performance of companies with female CEOs and companies without female

CEOs, the financial performance of companies with executive-level women, those

who are sitting in boardrooms, and compare them with those without female

executives. This study conducted the hypothesis tests to examine differences in

financial performance between companies with female CEOs and those without.

Pieter Van Beurden & et al. (2009)60 reported The European Identity in

Business and Social Ethics, The Worth of Values, A Literature Review on the

Relation between Corporate Social and Financial Performance that the Relation

between Corporate Social and Financial Performance. One of the older questions in

the debate about Corporate Social Responsibility (CSR) is whether it is worthwhile for

39
organizations to pay attention to societal demands. This debate was emotionally,

normatively, and ideologically loaded. Up to the present, this question has been an

important trigger for empirical research in CSR. However, the answer to the question

has apparently not been found yet, at least that is what many researchers state. This

apparent ambivalence in CSR consequences invites a literature study that can clarify

the debate and allow for the drawing of conclusions. The results of the literature study

performed here reveal that there is indeed a clear empirical evidence for a positive

correlation between corporate social and financial performance. Voices that state the

opposite refer to out-dated material. Since the beginnings of the CSR debate, societies

have changed. It can therefore clearly state that, for the present Western society,

Good Ethics is Good Business.

Aitken Et (2009)61 studied Financial Analysis and Price Discovery, the

bank\ brokerage firm has top-rated financial analysts and high wall street search

ranking for their research was significantly related to that firms contribution to price

discovery of the process by which information is incorporated into the stock prices.

This study related to cross-sectional characteristics of the quality of brokerage

research, the asymmetric information environment and order flow volume to a

microstructure measure of price discovery developed by Granger and Gonzalo. It

measured analysis research quality with an industry-specific ranking by institutional

investors, with an opinion survey of trading desk personnel and with the number of

top three analysts across all industries employed by the bank/ brokerage firm.

40
 Edward Nelling & et al. (2009)62 examine Corporate social responsibility

and financial performance, the causal relation between corporate social

responsibility (CSR) and financial performance. Consistent with past studies, it finds

that the two variables appear to be related when they use traditional statistical

techniques. However, using a time series fixed effects approach, find that the relation

between CSR and financial performance is much weaker than previously thought. It

also finds little evidence of causality between financial performance and narrower

measures of social performance that focus on stakeholder management. The study

suggested that strong stock market performance leads to greater firm investment in

aspects of CSR devoted to employee relations, but that CSR activities do not affect

financial performance. It concluded that CSR is driven more by unobservable firm

characteristics than by financial performance.

Dharmendra S. Mistry(2010)63 in this study A Comparison of Financial

Performance of Major Gujarat Pharma players through value added and

economic value added. The purpose of this study is to classify major Gujarat

pharmacy players in cohesive categories on the basis of their financial characteristic

revealed by the financial statements. The study also revealed that economic value

added has also positive correlation with firm size, funds of proprietors, and funds of

money lenders and have significant impact on economic volue added.

Yimin Zhang & et al. (2010)64 considers the cost structure, profitability and

productivity of the Chinese textile industry and estimates the impacts of RMB

appreciation on this industry for 19992006. It was found that the industry has

suffered from very low profit margins and returns on capital. Because input prices

41
have been increasing, particularly since 2001, generating profits has become more

difficult for the industry. Nevertheless, the industry achieved substantial productivity

growth during the period examined. Although at an inadequate level, the profitability

of the industry did show some signs of improvement. As long as this trend continues,

the industry could obtain a decent level of profitability. Since 2005, however, the

industry has faced a new challenge: the appreciation of the RMB. Based on 2006 data,

it estimated the maximum rate of RMB appreciation that the industry would be able to

sustain to be approximately 5 percent a year.

Shveta Kapoor (2010)65 examines the impact of Corporate Social

Responsibility (CSR) on Corporate Financial Performance (CFP) in terms of

profitability and growth after controlling the effect of other variables on financial

performance. Secondary data on CSR based on 93 companies operating in India have

been analyzed by applying content analysis of annual reports for the year 200506.

For CFP and control variables, secondary data have been collected for seven-year

period from 19992000 to 200506 from Prowess, electronic database developed by

Centre for Monitoring Indian Economy (CMIE), Mumbai. The Statistical tests namely

factor analysis and multiple regression analysis has been applied. The results indicate

that a significant positive impact of CSR on corporate profitability and insignificant

positive impact on corporate growth. The study is helpful for managers in considering

the positive impact of CSR on corporate profitability while taking decisions about

investing in CSR areas.

42
 Algorithms for business education and research in the 21st century (2010)66.

Financial performance analysis of US and world telecommunications

companies: Importance of Information Technology in the telecommunications

industry after the AT&T breakup and the NTT divestiture Decision Support

Systems. This article highlights the Importance of Information Technology in the

telecommunications industry after the AT&T breakup and the NTT divestiture

Decision Support Systems New concepts, methodologies and algorithms for business

education and research in the 21st century. This study investigates the financial

performance of the world telecommunications industry by DEADA (Data

Envelopment AnalysisDiscriminant Analysis). The proposed use of DEADA has a

linkage with Altman's Z score that has long served as a methodological and

conceptual basis in finance. Based upon the Z score of telecommunications

companies, it ranks them for financial assessment. After evaluating the financial

performance of the firms, this study pays attention to the financial performance of

AT&T (American Telephone & Telegraph) and NTT (Nippon Telegraph and

Telephone) after their divestiture. This study finds that AT&T outperformed NTT

because AT&T changed itself to an IT (Information Technology) company that

provides wireless communications services and other IT services, but NTT separated

IT and wireless services into the other companies after the breakup.

Gurbuz Osman & et al. (2010)67 evaluates Corporate Governance and

Financial Performance with a Perspective on Institutional Ownership: Empirical

Evidence from Turkey the impact of corporate governance on financial

performance in Turkey, taking the issue of institutional ownership into account. The

43
purpose of this study is also to explore how the financial performance of the

companies which are listed in the Corporate Governance Index is affected by

institutional ownership, distinguishing between domestic and foreign ownership. It

employs panel data analysis on a sample of 164 firm-year observations for real sector

firms on the Istanbul Stock Exchange (ISE) covering the four year time span from

2005-2008. The results of the analyses demonstrate the positive influence of corporate

governance and institutional ownership on the financial performance. Additionally,

the impact of institutional investors is found to be more strongly pronounced on firms

listed on the corporate governance index.

Aerts Walter & et al. (2010)68 in Financial performance explanations and

institutional setting their investigation whether country differences in the

institutional setting for financial reporting affect the attributes of managers

explanations of performance in management commentary reports. It includes 172

listed companies from five industries (building materials, food processors,

pharmaceuticals, bio-technology and retail) in the UK, Australia, the USA and Canada

in 2003. The researchers found significant country differences in attribution properties

of performance explanations in management commentary reports. The US and

Canadian companies are generally less assertive and less defensive in causal

explanations offered as compared to their counterparts in the UK and Australia. The

North American companies are also more extensive and formal in their explanations,

relying more heavily on technical-accounting language. These tendencies are most

pronounced in the USA, where the aggregate of private and public enforcement is the

greatest. Taken together, the evidence suggests that higher expected regulatory and

44
litigation costs induce a more elaborative, but risk-averse explanatory stance that may

well reduce the overall incremental value of the overall financial performance offered.

Ried Edwardj & et al. (2010)69), Signaling Firm performance through

financial Statement Presentation, investigate whether managers presentation of

special items within the financial statements reflects the economic performance or

opportunism. Specifically, special items presented as a separate line item on the

income statement (income statement presentation) to those aggregated within another

line item with disclosure only in the footnotes (footnote presentation). The study is

motivated by standard-setting interest in performance reporting and financial

statement presentation, as well as prior research investigating managers presentation

choices in other contexts. Empirical results reveal that special items receiving income

statement presentation are less persistent, relative to those receiving footnote

presentations. These results are consistent across numerous alternative specifications.

Overall, the findings are consistent with managers using the income statement versus

footnote presentation to assist users in identifying those special items most likely to

differ from other components of earnings - that is, for informational, as opposed to

opportunistic and motivations.

Roy Tirthankar (2010)70 surveys Technological change in Indian textiles

Industry, the technological changes in the industry during the period since 2005, the

onset of reforms in the country. Although the industry is generally termed as a low

technology one, it does employ high technology processes and machinery.

Liberalization has resulted in the importation of second hand machinery and

technological changes in the domestic textile machinery sector.

45
 Truetf Lila and Truetf Dale (2010)71 New Challenges for the South

African Textile and Apparel Industries in the Global Economy used a cost

function to investigate the presence of scale economies and the nature of input

interrelationships. The findings include statistically significant economies of scale

present in both industries and cross price elasticity estimates indicating that most

inputs are substitutes for one another. The first result offers an opportunity to reduce

unit costs if these industries can grow their markets. However, lower prices on

imported intermediate goods will likely decrease the demand for domestic inputs. The

cross price elasticity of demand is relatively low in some cases, consistent with

domestic input market rigidities and international trade restrictions.

Shurveer S. Bhanawat (2011)72 in this study Impact of Financial Crisis on

The Financial Performance of The Indian Automobile Industry India a country

diverse in culture and religion, strong in will and manpower, large in size and

opportunities has become a highly wooed automobile market. Despite the impact of

the financial and economic crisis, Indias automobile economy is booming. Due to

global financial crisis various sectors of industries were affected. In this connection

here we tried to judge the impact of financial crisis on Indian Automobile Industries

with the help of statistical significant techniques. On the analyses of the t-Test and

Analysis of Variance, it is found that the impact is not significant which proves that

though the global economies are impacted by recession, the Indian Automobile Sector

showed resilience and was not affected significantly by the recession. It goes to show

that the Indian automobile market, though impacted by export income, did not

crumble under recession, as the volumes were significantly met by local demand,

46
thereby proving that the Indian economy is a self sustaining economy, not

significantly impacted by the financial crisis.

Mine Aysen Doyran & et al. (2011)73 suggested Lesson for Latin America

from the Asian textile industry experience the lessons for Latin America from the

Asian textile industry experience. This paper examines recent statistics in US textile

and clothing trade with selected Latin American and Asian economies, comparing

data on textile exports from the top 10 suppliers between 1995 and 2003. It evaluates

the initial effects of the Agreement on Textiles and Clothing (ATC) of 1995, which

provided for a 10-year quota phase-out process for WTO member countries. Since its

accession into WTO, China has replaced Mexico as the top supplier of goods to the

US. In addition, a brief comparison with other international experience of emerging

economies is provided in order to elucidate the relevance of the textile industry in the

region and world economy. This empirical work can be the starting point for policy

makers to design long-term policies that are needed for Latin America to compete

successfully in the US market and promote the restructuring of clothing and textile

production at the country level.

Prasanta Paul (2011)74 reported that Financial Performance Evaluation - A

Comparative Study of Some Selected NBFCs. In this study, five listed NBFCs have

been considered for analyzing comparative financial performance. Different statistical

tools like, Arithmetic mean, Standard Deviation, Coefficient of Variance, Correlation

and Analysis of Variance have been used extensively. Arithmetic Mean (AM) is an

ideal measure of central tendency, which is rigidly defined, easy to calculate, based on

all observations and affected least by fluctuations of sampling has been applied in this

47
study. It has been used to get a stable average and it is easy to understand the results

of the study. It conclude that the selected companies differ significantly in terms of

their financial performance indicators from one to another, may be for the different

services they provide. There are no significant differences in the last five years in the

management of financial performance of each selected NBFCs, except marginal

deviation in some cases in the year 2006-07 may be for the effect of general recession

in that period

Kirca Ahmet(2011)75 focuses study on Firm-Specific Assets,

Multinationality and Financial Performance - A Meta-Analytic Review and

Theoretical Integration. The meta analysis were used at two hundred and twenty

independent samples and examines the predictions of internalization theory in the

context of the multinationality-performance relationship. The findings indicate that

multinationality provides an efficient organizational form that enables firms to transfer

their firm-specific assets to generate higher returns in international markets. In

addition, the results delineate the conditions under which firm-specific assets have the

strongest impact on the multinationality-performance relationship. Meta-analytic

evidence also suggests that multinationality has intrinsic value above and beyond the

intangible assets that firms possess, given analyses controlling for firms' international

experience, age, size, and product diversification.

Sheela Christina (2011)76 carried out the study on Financial Performance

of Wheels India Limited-Chennai. The study deals with Analytical type of research

design with the help of secondary data collection method. For this purpose the

48
researcher took past five years data and also checked out for the validity and

reliability before conducting the study. The researcher used the following financial

tool namely ratio analysis, comparative balance sheet and DuPont analysis and also

statistical tools such as trend analysis and correlation. Profitability ratios indicate there

is a decrease in the profit level, utilization of fixed assets and working capital in the

last financial year. Thus the company can take necessary steps to improve sales and

profit. Finally, the study reveals that the financial performance is satisfactory.

Neha Mittal (2011)77 studies the determination of capital structure choice of

the selected Indian industries. The main objective is to investigate whether and to

what extent the main structure theories can explain the capital structure choice of

Indian firms. It has applied multiple regression models on the selected industries by

taking data for the period 2001-2008. It examines the relevance of capital structure in

selected Indian industries based on a regression analysis and data study. It concludes

that the main variables determining capital structure of industries in India are agency

cost, assets structure, non-debt tax shield and size. The coefficients of these variables

are significant at one per cent and five per cent levels.

2.3 CONCLUSION

A Literature review can be just a summary of the sources, but it usually has an

organizational pattern and combines both summary and synthesis. From the above

literature, reviews related to Petroleum Industries will help to analyze the research

problem of financial performance of Petroleum industries.

49
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