A STUDY ON FINANCIAL PERFORMANCE USING FINANCIAL RATIOS OF SELECTED BSE NSE LISTED ENGINEERING SMALL AND MEDIUM ENTERPRISES (SMEs) OF INDIA

Abstract

India's economy is expanding quickly and the country is becoming a global leader. Even while big enterprises account for a major proportion of GDP, micro, small, and medium-sized enterprises also have continued to make a substantial contribution over the years. The micro, small, and medium enterprises are the backbone of the Indian economy, employing over 11 crore people and accounting for approximately 49.87% of all exports in the country. About 633.88 lakh MSMEs contribute to 28.77% to India's GDP. The study aims the financial performance of small and medium-enterprises in India with special reference to Maharashtra region. The population frame of BSE and NSE listed SMEs in India is projected to be more than 22,000, based on the Prowess IQ database as of 15.8.2023, from which a sample of 10 engineering companies are selected based on market capital for the present study. To understand the liquidity and profitability performance, eight different financial ratios were employed. Appropriate statistical tests such as mean, standard deviation and ANOVA were used on the secondary data collected from the Prowess IQ database for the financial year 2013-14 upto year 2022-23. The majority of medium enterprises did better in terms of profitability performance (return on assets, return on equity, return on capital employed, net profit margin and gross profit margin). The performance of small businesses was high in profitability (price-earnings ratio and yield ratio) and liquidity (current ratio). Overall performance of Medium enterprises was better than compared to small enterprises. Keywords: Small and Medium Enterprises, Financial Performance, Financial Ratios, Maharashtra.