Effects of Economic Growth Rate on Financial Performance of Indian Companies

Abstract

Aim of this study is to investigate the impact of economic growth rate on financial performance of Indian companies. Secondary data of 15 years from 2004 to 2018 has been collected of various large capital companies of India listed in stock exchange. In this study in regard to financial performance, NPR, CR, DE, ROCE and ROA and the data of GDP growth (%) in regard to economic growth. Panel regression method has been used with the help of Eviews to check the impact of economic growth rate on financial performance of Indian companies. Results of the study indicates economic growth rate have positive and significant impact on financial performance of large capital companies of India. Indicators of financial performance, ROA, DE, CR, ROCE and NPR positively and significantly determined economic growth (GDP). Growth of Indian economy can be increased by improving financial performance.