Evaluation of performance of the Indian power sector from the lens of ratio analysis

Sharadindu Bikash Majumdar, Susmita Chatterjee, J.K. Das and Sangita Dutta Gupta

International Journal of Business and Globalisation, 2024, vol. 38, issue 4, 591-609

Abstract: The financial ratio analysis is an analytical tool performed to verify the financial efficiency of a firm. In this study, different financial or accounting ratios have been considered and performance evaluation of Indian power sector has been conducted. A comparative evaluation has also been carried out between the public and private power sectors associated in the generation and distribution of power in India. It was revealed from the study that in case current ratio (CURAT), return on asset (ROA), return on capital employed (ROCE) and return on equity (ROE), the values of mean are higher for the public sectors compared to the private sectors. However, the private sectors also have higher mean values for the ratios, return on sale (ROS), debt-equity ratio (DERAT) and asset turnover ratio (ATRAT). The steady financial position of the private sector is supportive to well-structured privatisation of power sector to overcome the gaps in the distribution of electricity.

Keywords: financial efficiency; ratio analysis; public firm private firm comparison; current ratio; CURAT; return on asset; ROA; return on capital employed; ROCE; return on equity; ROE; return on sale; ROS. (search for similar items in EconPapers)
Date: 2024
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