MNCs perform better than Indian peers
In the case of MNCs, all the selected ratios at the aggregate level showed an increase except capital turnover ratio during 2009-10, against that of 2008-09, but in the case of Indian companies, all the ratios showed a decline except profitability ratio during the same period.
The aggregate sales of the 47 MNCs have increased by 11.9% from Rs 1.33 lakh crore in 2008-09 to Rs 1.49 lakh crore in 2009-10. Their total profit before tax (PBT) has increased by 20.36% during the above period, increasing the profitability ratio measured as a percentage of the PBT to sales ratio from 17.69% in 2008-09 to 19.03% in 2009-10. This is significant, for with lower sales growth, the MNCs have succeeded in raising their return on sales. We considered four ratios for the comparison. They are profitability = (profit before tax/ sales) x 100; capital turnover = sales/total funds; working capital turnover = sales/net current assets; stock turnover = sales/inventories.
On the other hand, corporate India achieved an 2.71% growth in sales during 2009-10, and the PBT has increased by 38.93% to Rs 2.15 lakh crore during 2009-10 from
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