Financial Performance of Indian Pharmaceutical Companies: Analysis of Leverage and Cost of Capital

Abdulkareem, Ahmed Mahdi

doi:10.47631/jareas.v1i1.15

Cited by 5 publications

(3 citation statements)

References 3 publications

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“…The findings of this study were in line with the agency theory on increase in debt leading to increase in agency costs through the increase of interest rate of debt from creditors. Abdulkareem and Ahmed, (2020) suggested that leverage and cost of capital make very important variables investors consider when deciding whether to invest in pharmaceutical companies.…”

Section: Literature Reviewmentioning

confidence: 99%

Effects of Cost of Capital on Firm Performance in Kenya

Ochoki,

Oloo,

Mwabaka

et al. 2023

EAFJ

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This paper discusses the importance of the cost of capital and its impact on the performance of firms in Kenya. The cost of capital is affected by various factors such as interest rates, inflation, market conditions, and government policies. Financial managers use discounting cash flow techniques to evaluate capital investments, which requires the estimation of the project's cash flows and the discount rate. The article also explores the concept of capital structure and its significance in determining the cost of capital. Managers need to manage the capital structure effectively to optimize shareholder wealth and minimize the company's cost of capital. The article highlights the importance of balancing the mix of financing sources between debt and equity. High costs of capital can limit a firm's access to financing, while low costs of capital can improve a firm's investment and growth opportunities. This article concludes that the cost of capital is an essential factor that affects the performance of firms in Kenya. It impacts investment decisions, financial structure, and competitiveness in the market. Researchers suggest that managers should balance the use of debt and equity financing in an optimum manner to maximize shareholder wealth. However, the research suggests that high costs of capital can discourage firms from investing in new projects, reducing growth and profitability. Firms need to evaluate their cost of capital and consider strategies to lower it, such as improving creditworthiness or exploring alternative financing options.

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Section: Literature Reviewmentioning

confidence: 99%

Effects of Cost of Capital on Firm Performance in Kenya

Ochoki,

Oloo,

Mwabaka

et al. 2023

EAFJ

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“…India is the 12th largest exporter of medical goods (Kimbowa et al, 2022;Prasad et al, 2019;Cha et al, 2018). Abdulkareem (2020) conducted a study on analysis of leverage and cost of capital of pharmaceutical companies. Purpose of this study was analysed degree of leverage and its impact on cost of capital.…”

Section: Introductionmentioning

confidence: 99%

A study on Financial Indicators of selected Pharmaceutical Companies

Mayabhai

Zala

2022

jommerce

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The aim of this study is to analyses financial ratios. This study covers four different ratios; net profit margin ratio, return on assets ratio, current ratio and quick ratio as financial indicators. This study is based on secondary data and data are collected from moneycontrol.com. Researcher has selected two pharmaceuticals’ companies by using simple random sampling. Independent t-test has been used as a statistical tool and findings were discussed.

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“…The working capital of a company serves the same function as the heart does in the human body in terms of generating revenue. Working capital funds are created and circulated throughout a company in the same way as blood circulates in the heart (Abdulkareem, 2020). This is due to the fact that working capital is sometimes referred to as circulating capital.…”

Section: Introductionmentioning

confidence: 99%

An Analytical Study of Working Capital Management of Selected Cement Companies in India

Abdulkareem

Chakrawal

2021

JAMREMS

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This article is to analyze and evaluate working capital management of selected cement companies. The main purpose of this study is to find out the liquidity position of selected cement companies in India, five companies were selection .The duration of study is five years start from 2015-16 to 2019-20. Two ratios were used for the analysis of data: current ratio quick ratio. To test hypothesis ANOVA was used. The major findings of the study indicate that there are significance difference in the quick ratio and current ratio of selected cement companies. Based on the data analysis, there is a mixed trend in the current ratio during the year 2015-16 to 2019-20. The analysis also shows the ups and down in the quick ratio of the selected cements companies during the period of 5 year. It indicates that there is mixed trend in quick ratio during the year 2015-16 to 2019-20. Removing short-term debt from balance sheet allow companies to have better quick and current ratios and allow to save some of liquidity in the near term and put in to better use. Companies are suggested to adopt more aggressiveness in maintaining their current rasio.

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Financial Performance of Indian Pharmaceutical Companies: Analysis of Leverage and Cost of Capital

Cited by 5 publications

References 3 publications

Effects of Cost of Capital on Firm Performance in Kenya

Effects of Cost of Capital on Firm Performance in Kenya

A study on Financial Indicators of selected Pharmaceutical Companies

An Analytical Study of Working Capital Management of Selected Cement Companies in India

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