Revamping of Companies through Demerger: A Case Study of Gulf Oil Corporation Ltd

Abstract

This research paper focuses on the study of the impact of demerger in Gulf Oil Corporation Ltd. In today’s competitive world of business, there is a paradigm shift observed in the manner that the businesses are carried out by the corporate entities with a view to ameliorate their business operations and processes so as to survive the cut throat competition from the competitors in the industry in which they operate. This in turn may result in the organization to gain a competitive advantage over its competitors especially in the long run. The study performs an analysis of the effects of the demerger in case of the Gulf Oil Corporation Ltd. to determine the changes in the Earnings per share, Net profit margin and Return on Capital employed, of the said company. The paired T test technique has been employed in the present study. The study revealed that there was no significant impact of demerger on Earnings per share and Return on Capital Employed, but the demerger had a significant impact on Net Profit Margin.