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Determinants of Profitability of Food Industry in India: A Size-Wise Analysis

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  • Ramachandran Azhagaiah

    (Kanchi Mamunivar Centre for Postgraduate Studies, India)

  • Raju Deepa

    (Kanchi Mamunivar Centre for Postgraduate Studies, India)

Abstract

Profitability is the profit earning capacity, which is a crucial factor in contributing to the survival of firms. This paper is a maiden attempt at estimating the impact of size on profitability, considering the ‘size’ as the control variable. For this purpose, the selected firms are classified into three size categories as ‘small,’ ‘medium,’ and ‘large’ based on the sales turnover. The results show that volatility and growth are the major predictors in determining profitability in case of small size firms while growth is important in determining the profitability of medium size firms. Capital intensity has a significant positive coefficient with the profitability of large size firms. The overall result shows that the larger the size of the firm, the more the investment in long lived assets has helped to increase the profitability of the firm unlike the trend in cases of small size and medium size firms.

Suggested Citation

  • Ramachandran Azhagaiah & Raju Deepa, 2012. "Determinants of Profitability of Food Industry in India: A Size-Wise Analysis," Management, University of Primorska, Faculty of Management Koper, vol. 7(2), pages 111-128.
    • Handle: RePEc:mgt:youmng:v:7:y:2012:i:2:p:111-128
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    References listed on IDEAS

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    1. Metin Atmaca & Engin Demirel, 2017. "Economic Impact on Financial Ratios of Food Industry at Istanbul Stock Exchange Listed Firms," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 537-541.
    2. Shahida Shahimi & Hafizuddin-Syah B.A.M. & Hanisah S.F., 2023. "Sustainability Practices and Financial Profitability: The Case of the World’s Top 20 Crude Palm Oil Producers," SAGE Open, , vol. 13(4), pages 21582440231, October.
    3. , Aisdl, 2020. "Determining factors of financial performance of agricultural listed companies in China," OSF Preprints zc98p, Center for Open Science.
    4. Rađo, Dijana & Peštović, Kristina, 2022. "Factors of Profitability: Evidence from the Serbian Manufacturing Sector," Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference (2022), Hybrid Conference, Opatija, Croatia, in: Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Hybrid Conference, Opatija, Croatia, 17-18 June 2022, pages 299-309, IRENET - Society for Advancing Innovation and Research in Economy, Zagreb.

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