LITERATURE REVIEW

Long back (1957), EF Donaldson: referred to the importance of business and financial reporting. He
highlighted that the economy depends on the business organizations for goods and services. United States
believes in corporate world. The financial activities of business enterprises of production and sale is of
utmost importance. In his well-known publication (Corporate Finance, 1957) he has referred to all important
aspects of business finance like organization structure, securities, production, capitalization, working capital,
administration of income, expansion and combinations (mergers), reorganization and readjustments.

Robert Anthony: Professor of Accounting and Financial Control at Harvard University has written many
authoritative books on accounting 182 and financial management. He defines Accounting as a means of
collecting, summarizing, analysing and reporting in monetary terms, information about the business. This
simple definition highlights the importance of accounting and financial information in the business
enterprise. There is a reference to the following accounting principles and scope of the field of accounting
and finance.

E.V.K. Padmini and P.K. Lekha (1992): studied the financial performance of Shire Narayana Power loom
Industrial Co-operative Society, Nadathara in Kerala for the period from 1980-81 to 1987-88. The
performance was evaluated with the help of the selected ratios namely turnover ratios, financial ratios and
liquidity ratios. The relevant parameters used for the evaluation were: cost of goods sold, administrative
expenses, sales, current assets, current liabilities and fixed assets. The study revealed that the cost of goods
ratio was very high around 70to 80 percent of the value of sales, administrative ratio more or less remained
the same, current and liquidity ratios were found to be low from 1983-84onwards. The study concluded that
the financial performance of the society was not up to the level.

Vasanthamani (1982): in her study “The Financial Performance of Lakshmi Machine Works Limited”. The
objective of the study was to analyse the financial performance of Lakshmi machine work with a view to
analyse 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.

Parvathi (1990): 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): 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): in Profitability, growth and risk (optimization), an attempt was made to understand the
profitability differentials in terms of simultaneously determinant-relational among profitability, growth and
risk. The variables are endogenous infirm profit maximization.

Gnanavelu.N (1996): 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 inworking capital cannot be avoided.

Sardeesh Babu (1999): 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 increase in the
growth rate of sales, profit before tax and profit after tax.