Cement Industry Literature Review

CHAPTER II

REVIEW OF LITERATURE

2.1 INTRODUCTION This chapter presents the review of literature relating to the study undertaken. The collection of reviews has been made from various studies undertaken by academicians, practitioners, researchers etc, from time to time. These reviews will enlighten the existing knowledge of the researcher. Besides this, the reviews of empirical studies explore the avenues for the present and future research related to the subject matter in order to understand the research problem the earlier attempts made by the academicians, economist, socialist, etc, are needed to be studied the review of literature guides the researchers for getting better understanding of methodology used, limitation of various available

He made comments on profitability of large public limited cement companies in India. In order to bring out fluctuations and to offer possible causes for such fluctuations. The study revealed that the profitability in cement industries had fluctuated very widely with low rate during the period under review. The profit margin in the cement had shown declining trend whereas the assets turn over showed an increasing trend. Cherukuri (1984) compared the cost of capital and financial leverage of American and Indian companies. This study make an empirical examination of the effect of financial structure on the cost of capital of a firm by employing cross-sectional analysis in less developed and developed capital markets. The results obtained showed that in less developed capital markets, moderate amounts of debt will lower the firm’s cost of capital, while in developed capital markets after allowing for the tax advantage of debt financing, the cost of capital to the firm is independent of its financial

(1994) recently published a Meta –analysis of the impact of strategic planning on financial performance omitted a major study of corporate planning in fortune five hundred manufacturing firms. This article briefly reviewed that study in the light of the result of the Meta– analysis. Additional analysis examined performance and firms’ survival over a longer time period than in the original book. The over all conclusions were that a small but positive relationship between strategic planning and performance existed and persisted. China Rao N. and Rao. K.V. (l995) , in their study, revealed that the working capital problems faced by executives were huge in the areas of collection of debts, accumulation of finished goods, availability of working funds and uncertain cash flows. Rengarajan. M.R (1995), in his study on working capital for sick industry, revealed that even profit-making companies were no exception, because, often their symptom of sickness was hidden by their profits. A close watch on the financial parameters would check the sickness at the gross root level, facilitating remedial measures. The interest burden of the industry and percentage of operating expenses on turnover were going up which resulted in depleting the profits. A detailed evaluation of operating expenses and shifting for soft loans or conversion of higher interest loans to equities could sort out the sickness and pave the way for revival