Comparative Analysis of Automobile Companies in India Through Du Pont Model

International Journal of Economics and Management Studies

© 2020 by SSRG - IJEMS Journal

Volume 7 Issue 3

Year of Publication : 2020

Authors : Prof. Preeta Sinha, Deepika Thapa

10.14445/23939125/IJEMS-V7I3P122

How to Cite?

Prof. Preeta Sinha, Deepika Thapa, "Comparative Analysis of Automobile Companies in India Through Du Pont Model," SSRG International Journal of Economics and Management Studies, vol. 7,  no. 3, pp. 159-168, 2020. Crossref, https://doi.org/10.14445/23939125/IJEMS-V7I3P122

Abstract:

The study is an attempt to examine the DuPont equation in the Automobile sector in India. Du Pont Analysis distributes the Return on Equity (ROE) into two components –Return on Assets (ROA) and Equity Multiplier (EM). The major concern of Investors, which is reflected by ROE, is examined by comparing the major automobile companies in the sector. The impact of independent variables-Return on Assets (ROA) and Equity Multiplier (EM) is examined on Return on Equity (ROE) through Multiple Regression Analysis in the study. Top three Automobiles companies in India, on the basis of their market capitalization as of 31st March 2019, are taken into study. The financial data for ten years ranging from 2010 to 2019, is used for the research purpose. From customers investment perspective Tata Motors Ltd. is found to be less risky than the other two companies Eicher Motors and Mahindra & MahindraLtd.

Keywords:

Du Pont, Return on Equity, Return on Assets, Equity Multiplier.

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