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IJSTR >> Volume 8 - Issue 11, November 2019 Edition

International Journal of Scientific & Technology Research  
International Journal of Scientific & Technology Research

Website: http://www.ijstr.org

ISSN 2277-8616

Predicting Financial Performance Of Selected Listed Companies Through Discriminant Function Analysis

[Full Text]



Jayant, Vijay Singh



Discriminant Function Analysis, Financial performance, GDP Ratio Analysis, Revenue, Shareholder’s funds, Stakeholders Variate.



Indian economy, hitting a rough patch, slipped to 5% growth rate in the first quarter of FY20 which is the lowest in last six years, owing to sluggish demand, collapse of automobiles industry, mounting NPA, cautious approach by lending institutions, structural transformation and economic reforms etc. The economy blooms as the industry expands with sound financial health while the economy trembles if the financial statements of the companies predict tougher times ahead. Be it the slowdown or the boom, the stakeholders in the business keep continuously predicting the financial performance of the company to safeguard their vested interests. To survive today’s volatile and vying environment, both business and its stakeholders need to be innovative and agile. But, no matter how efficiently planned and agile the business is, the key lies in accuracy and reliability of the information predicted in corporate and financial analyses. Which company or investment may give expected returns? How sound the operational and financial health of the company is? What financial information indicates high growth prospects and sound health of a company? Answers of all such crucial questions lie upon the accurate prediction and a correct set of predictors. This is even more tricky and subjective in nature to chose which variables are true or significant indictors among the plenty of information. There has always been debate upon the selection of different financial and managerial variables, and also upon the statistical tools adopted to shortlist such variables. The present study attempts to give a function of key financial ratios and financial indicators which are significant in predicting the financial performance of the companies. The Discriminant Function Analysis has been applied to derive the variate significant for the revenue of a company.



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