Chapter-6: Analysis of Efficiency of Asset Management of the selected Public Sector Oil and Gas Companies in India

Transcription

1 Chapter-6: Analysis of Efficiency of Asset Management of the selected Public Sector Oil and Gas Companies in India 6.1 Introduction Turnover ratios or activity ratios bring out the relationship between sales and various assets. Efficient management of fixed assets and current assets leads to higher profitability. Depending upon the various concepts of assets, six ratios have been calculated in order to assess the company s ability regarding the utilization of assets to generate turnover. These are as under: (i) (ii) (iii) (iv) (v) (vi) Fixed Assets Turnover Ratio (FATR) Total Assets Turnover Ratio (TATR) Working Capital Turnover Ratio (WCTR) Inventory Turnover Ratio (ITR) Debtors Turnover Ratio (DTR), and Cash Turnover Ratio (CTR) Fixed Assets Turnover Ratio (FATR) Some writers have advocated the use of the ratio of sales to fixed assets on the ground that, as the investment in fixed assets is made for the ultimate purpose of generates sales, the ratio of sales to fixed assets is a measure for the achievement of that purpose. It is used to measure the velocity of operating fixed assets. Higher is the ratio, better is the efficiency of assets management. If the ratio is too high, it indicates that the firm is overtrading on its assets, but in case the ratio is low, it signifies that the firm has an excessive investment in fixed assets. A falling FATR suggests erosion of commercial viability of the enterprise. The measure may be fall of production capacity of assets due to ageing, unresolved labour problems, failure in marketing function, losing in market share, etc. The fixed assets turnover ratio can be calculated dividing net sales by fixed assets. 180

2 6.1.2 Total Assets Turnover Ratio (TATR) This ratio is calculated dividing net sales by the value of total operating assets. Total operating assets exclude investments, capital work-in-progress and other assets which do not contribute to the generation of sales. A high ratio indicates over-trading of total assets while a low ratio indicates unnecessary blocking of fund in assets resulting in idle capacity. The traditional standard for the ratio is two times. Some people use cost of goods sold in the numerator instead of sales. The total assets turnover ratio may be computed dividing cost of goods sold by total operating assets Working Capital Turnover Ratio (WCTR) In order to test the efficiency with which net working capital is utilized, many analysts determine the ratio of net sales to net working capital, i.e. the turnover of working capital. Larger the net sales in comparison with net working capital, the less favourable the situation is likely to be if the resultant net working capital turnover has been made possible by the use of an excess amount of current credit. The real danger lies in the possibility of a decline in sale due to unforeseen circumstances, like, cancellation of orders, strikes, depressions and competition. A high working capital turnover may be the results of favorable turnovers of inventories and receivables or may reflect an inadequacy of net working capital accompanied by low turnovers of inventories and receivables. On the other hand, a low turnover of net working capital may be the outcome of an excess of net working capital, slow turnover of inventories and receivables, a large cash balance or investment of working capital in the form of temporary investments. Thus in interpreting the net working capital turnover, the analysts should exercise considerable caution because the working capital turnover ratio is a composite of a number of relationships, each one of which should be analyzed carefully to account for changes from year to year or between companies. The working capital turnover ratio can be calculated dividing net sales by net working capital Inventory Turnover Ratio (ITR) Ideally this ratio should be constructed dividing the cost of sales during the past year by the average of stock held. The cost of sales figure has become more widely available though there are still causes where figure is not available. Maintaining sales typically requires inventories. A low inventory often suggests overstocked, slow-moving or obsolete inventories. It can also signal 181

3 overestimation of sales. A high turnover can imply underinvestment in inventory, threatening customer relations and future sales. Inventory turnover involves a trade-off between funds accumulated in inventory and the potential loss of customers and future sales. The inventory turnover ratio can be calculated dividing cost of goods sold by average inventory at cost or net sales by average inventory at cost or net sales by average inventory at selling price. Inventory turnover is an indication of the velocity with which merchandize moves through the business. An inventory turnover ratio, standing by itself, means absolutely nothing, because there is no fixed norm for inventory turnover which depends greatly on the nature of the industry and on the sale policies followed by the firm. Therefore, to state that the turnover of a particular firm is say 5, shows nothing as to the wisdom of its inventory management policy. To give meaning to a turnover figure one must compare it with other such figures so that a comparative analysis for the individual firm over time is the appropriate type of evaluative device to use. Thus, a firm s turnover ratio in the year just ended is 5, whereas in the preceding year it was 6, and in the year before it was 7, strong evidence of growing deficiency in inventory management is brought out- though not conclusive by any means, it furnishes sufficient ground to warrant a thorough-going analysis of the situation. Likewise, should a firm s turnover ratio in the year just ended be 5 while those of its principal competitors were say 6, 7 and 8, an investigation of the causes of what appears to be a record of poor performance would surely be in order. A low inventory turnover may reflect dull business, over-investment in inventory, accumulation of merchandise at the end of the period in anticipation of higher prices or of greater sales volume, incorrect inventory resulting from the inclusion of obsolete and unsellable goods, an unbalanced inventory which means excessive quantities of certain inventory items in relation to immediate requirements, inflated inventory valuation, or a change in the distributive functions performed by the business-the management of a retail business may be entering the manufacturing or wholeselling phase of business. A high turnover may not be accompanied by a relatively high net income as profits may be sacrificed in obtaining a larger sale volume with the result that a higher rate of turnover is likely to prove less profitable than a lower turnover unless accompanied by a larger total gross profit although the rate of gross profit may well be the same or even slightly lower. 182

4 6.1.5 Debtors Turnover Ratio (DTR) If the annual turnover of a business is divided by the average debtors figure the resulting ratio reveals the number of times debtors are turnover in a year. Company selling on credit knows that the level of its receivables is a function of sales. A low receivables turnover is likely due to overextending credit, an inability of customers to pay, or poor collection activity. A high receivables turnover can imply a strict credit policy or a reluctance or inability to extend credit. Debtors turnover ratio often involves a trade-off between increased sales and accumulation of funds in receivables. The debtors turnover ratio may be calculated dividing trade debtors by sales per day where sales per day equal to net sales divided by number of working days. The amount of trade debtors and bills receivable depends upon sales volume, credit extension practice and the effectiveness of the collection period. Since debtors constitute a major element of current assets, the credit and collection policies of the business must be under continuous watch. The amount of trade debtors at the end of the accounting period should not exceed a reasonable proportion of net sales and debtors turnover ratio is an enabling device to find out as to how many days average sales are tied up in the value of amounts owing by debtors according to the balance sheet. The objective of the comparison implied in the debtors turnover ratio is to learn how old the accounts are and partly to learn how fast cash will flow from their collections. The larger the amount of trade debtors in relation to net sales that is outstanding at the end of accounting period, the greater would be the expense in connection with uncollectable accounts. A variation in the ratio of net sales to trade debtors from year to year, or as between companies, may be caused by specific factors, such as, changes in terms of sales; inclusion or exclusion of cash and instalment sales; special sales campaign at the end of accounting period; sales made directly to consumers or middlemen; price changes; the effectiveness of credit, collection and sales department; strikes and lock-outs and the stage of business cycle at the time the ratio is determined. 183

5 6.1.6 Cash Turnover Ratio (CTR) Cash and cash equivalents are held primarily for purposes of meeting day-to-day transactions and as a liquidity reserve to prevent shortages arising from imbalances in cash infolws and outflows. All businesses have and must maintain a relation between sales and cash. A too high cash turnover can be due to a cash shortage than might signal a liquidity crisis if a company has no ready source of cash. A low cash turnover might signal idle or excess cash. Cash accumulated for specific purposes or known contingencies often yields temporary decreases in turnover. The basic trade-off is between liquidity and accumulation of funds yielding little or no return. It indicates a firm s efficiency in its use of cash for generation of sales revenue. It is the inverse of cash to sales ratio. The cash turnover ratio can be computed dividing net sales by average cash balances. It signifies how well a firm manages its cash balances to generate sales revenue. A high cash turnover ratio indicates the effective and better utilization of cash resources. 6.2 Analysis of various ratios relating to Efficiency of Asset Management and ROCE of the selected Public Sector Oil and Gas Companies in India Table-6.1 to Table-6.6 highlight the analysis of various ratios relating to efficiency of asset management and ROCE of the selected public sector oil and gas companies in India during the study period from to The efficiency of asset management ratios which have been considered are fixed assets turnover ratio (FATR), total assets turnover ratio (TATR), working capital turnover ratio (WCTR), inventory turnover ratio (ITR), debtors turnover ratio (DTR) and cash turnover ratio (CTR). 184

6 Table-6.1: Selected Ratios relating to Efficiency in Asset Management and ROCE of ONGC during the study period from to Year FATR TATR WCTR ITR DTR CTR ROCE (%) Average Source: Compiled and computed from published annual reports of the company. Table-6.1 highlights the selected ratios relating to efficiency in asset management and ROCE of ONGC during the study period from to It also shows that there are fluctuating trends in the values of ratios relating to efficiency in asset management and returns on capital employed during the study period. The average values of FATR, TATR, WCTR, ITR, DTR, CTR and ROCE are 0.61, 0.70, 2.00, 16.63, 14.71, 4.66 and 30.97% respectively during the study period. 185

7 Chart-6.1: Diagrammatic presentation of selected ratios relating to efficiency in Asset Management of ONGC during the study period from to FATR TATR WCTR ITR DTR CTR Source: Table

8 Table-6.2: Selected Ratios relating to Efficiency in Asset Management and ROCE of IOCL during the study period from to Year FATR TATR WCTR ITR DTR CTR ROCE (%) Average Source: Compiled and computed from published annual reports of the company. Table-6.2 shows the selected ratios relating to efficiency in asset management and ROCE of IOCL during the study period from to It also explains that there are fluctuating trends in the values of ratios relating to efficiency in asset management and returns on capital employed during the study period. The average values of FATR, TATR, WCTR, ITR, DTR, CTR and ROCE are 4.50, 3.27, 17.89, 9.82, 37.03, and 17.45% respectively during the study period. 187

9 Chart-6.2: Diagrammatic presentation of selected ratios relating to efficiency in Asset Management of IOCL during the study period from to FATR TATR WCTR ITR DTR CTR Source: Table

10 Table-6.3: Selected Ratios relating to Efficiency in Asset Management and ROCE of OIL during the study period from to Year FATR TATR WCTR ITR DTR CTR ROCE (%) Average Source: Compiled and computed from published annual reports of the company. Table-6.3 reveals the selected ratios relating to efficiency in asset management and ROCE of OIL during the study period from to It also shows that there are fluctuating trends in the values of ratios relating to efficiency in asset management and returns on capital employed during the study period. The average values of FATR, TATR, WCTR, ITR, DTR, CTR and ROCE are 1.21, 0.73, 1.30, 15.68, 9.63, 2.32 and 33.21% respectively during the study period. 189

11 Chart-6.3: Diagrammatic presentation of selected ratios relating to efficiency in Asset Management of OIL during the study period from to FATR 20 TATR WCTR 15 ITR DTR 10 CTR 5 0 Source: Table

12 Table-6.4: Selected Ratios relating to Efficiency in Asset Management and ROCE of BPCL during the study period from to Year FATR TATR WCTR ITR DTR CTR ROCE (%) (-) Average (-) Source: Compiled and computed from published annual reports of the company. Table-6.4 reflects the selected ratios relating to efficiency in asset management and ROCE of BPCL during the study period from to It also highlights that there are fluctuating trends in the values of ratios relating to efficiency in asset management and returns on capital employed during the study period. The average values of FATR, TATR, WCTR, ITR, DTR, CTR and ROCE are 5.73, 4.80, (-) 0.17, 13.14, 65.57, and 16.22% respectively during the study period. One alarming fact is that the company has the negative working capital turnover ratio in the financial year that means the company uses negative working capital in that year. 191

13 Chart-6.4: Diagrammatic presentation of selected ratios relating to efficiency in Asset Management of BPCL during the study period from to FATR TATR WCTR ITR DTR CTR Source: Table

14 Table-6.5: Selected Ratios relating to Efficiency in Asset Management and ROCE of HPCL during the study period from to Year FATR TATR WCTR ITR DTR CTR ROCE (%) Average Source: Compiled and computed from published annual reports of the company. Table-6.5 explains the selected ratios relating to efficiency in asset management and ROCE of HPCL during the study period from to It also reveals that there are fluctuating trends in the values of ratios relating to efficiency in asset management and returns on capital employed during the study period. The average values of FATR, TATR, WCTR, ITR, DTR, CTR and ROCE are 5.69, 4.50, 0.24, 11.52, 63.82, 9.71 and 14.72% respectively during the study period. 193

15 Chart-6.5: Diagrammatic presentation of selected ratios relating to efficiency in Asset Management of HPCL during the study period from to FATR TATR WCTR ITR DTR CTR 10 0 Source:Table

16 Table-6.6: Selected Ratios relating to Efficiency in Asset Management and ROCE of GAIL for the period from to Year FATR TATR WCTR ITR DTR CTR ROCE (%) (-) Average Source: Compiled and computed from published annual reports of the company. Table-6.6 highlights the selected ratios relating to efficiency in asset management and ROCE of GAIL during the study period from to It also reflects that there are fluctuating trends in the values of ratios relating to efficiency in asset management and returns on capital employed during the study period. The average values of FATR, TATR, WCTR, ITR, DTR, CTR and ROCE are 1.21, 1.36, 0.05, 29.45, 18.61, 0.81 and 27.66% respectively during the study period. One alarming fact is that the company has the negative working capital turnover ratio in the financial year , that means the company uses negative working capital in that year. 195

17 Chart-6.6: Diagrammatic presentation of selected ratios relating to efficiency in Asset Management of GAIL during the study period from to FATR TATR WCTR ITR DTR CTR Source: Table

18 6.3 Computation and Analysis of ranks on the basis of average values of Asset Management Ratios of the selected Public Sector Oil and Gas Companies in India Table-6.7 highlights the analysis of the efficiency of various asset management of the selected public sector oil and gas companies in India during the study period from to For the purpose of comparative analysis, six efficiency ratios have been considered to give an eye view of the efficiency of asset management of all the selected public sector oil and gas companies in India. The six efficiency ratios which have been considered are fixed assets turnover ratio (FATR), total assets turnover ratio (TATR), working capital turnover ratio (WCTR), inventory turnover ratio (ITR), debtors turnover ratio (DTR) and cash turnover ratio (CTR). For computation purpose, the average values of all the selected ratios are considered to give the rank to the selected public sector oil and gas companies in India and highest rank has been assigned for the highest values of efficiency ratios during the said study period. 197

19 Table-6.7: Comparative Analysis of Efficiency in Asset Management (on the basis of average values) of the selected Public Sector Oil and Gas Companies in India during the study period from to Company/ Efficiency Ratios FATR Rank (a) TATR Rank (b) WCTR Rank (c) ITR Rank (d) DTR Rank (e) CTR Rank (f) Rank Total (g=a+b+c+d+e+f) Ultimate Rank ONGC IOCL OIL BPCL HPCL GAIL Source: Tables-6.1, 6.2, 6.3, 6.4, 6.5 and

20 At Table-6.7, considering fixed assets turnover ratio (FATR), it is seen that its average value is best for the company BPCL and secures the first rank followed by HPCL, IOCL, jointly OIL and GAIL for their repective same rank total, ONGC respectively occupying 2nd, 3rd, 4.5th and 6th rank positions during the study period from to Based on total assets turnover ratio (TATR), it is highlighted that the average of total assets turnover ratio is again best for the company BPCL and occupies the first rank followed by HPCL, IOCL, GAIL, OIL and ONGC respectively secure the other rank positions in sequence of their highest avareage values. From the viewpoint of working capital turnover ratio (WCTR), its average value is highest in case of IOCL and secures the first rank followed by ONGC, OIL, HPCL, GAIL and BPCL respectively occupying the 2nd, 3rd, 4th, 5th and 6th rank positions during the study period. Inventory turnover ratio (ITR) highlights that its average value is best for the company GAIL and occupies the first rank followed by ONGC, OIL, BPCL, HPCL and IOCL respectively secure the other rank positions in sequence of their highest avareage values. Based on debtors turnover ratio (DTR), it is revealed that its average value is best for the company BPCL and occupies the first rank followed by HPCL, IOCL, GAIL, ONGC and OIL respectively securing the 2nd, 3rd, 4th, 5th and 6th rank positions during the study period. From the viewpoint of cash turnover ratio (CTR), its average value is best for the company IOCL and secures the first rank followed by BPCL, HPCL, ONGC, OIL and GAIL respectively occupy the other rank positions in sequence of their highest avareage values. Based on the rank total of the selected companies (column g), ultimate ranks have been computed for the companies by assigning highest rank for the lowest rank total. Accordingly, BPCL secures the top rank position for its lowest rank total of 15 followed by IOCL, HPCL, GAIL, ONGC and OIL occupying the 2nd, 3rd, 4th, 5th and 6th rank positions for their respective rank totals of 17, 18, 24.5, 25 and 26.5 during the study period from to

21 6.4 Analysis of Correlation between the Return on Capital Employed and selected ratios relating to Efficiency in Asset Management of the selected Public Sector Oil and Gas Companies in India An attempt has been undertaken to measure the degree of association or relationship between the measure of profitability (i.e. ROCE) and the selected ratios relating to efficiency in asset management (i.e. FATR, TATR, WCTR, ITR, DTR and CTR) of the selected public sector oil and gas companies in India during the study period from to , for which correlation analysis has been applied taking into account their magnitudes by Pearson s simple correlation coefficient, for ranking of their magnitudes by Spearman s rank correlation coefficient and for highlighting the nature of their associated changes by Kendall s correlation coefficients. In order to examine whether the computed values of correlation coefficients between the measure of profitability and ratios relating to efficiency in asset management are statistically significant or not, t-test has been applied. Table-6.8 shows the degree of association or relationship between the measure of profitability (i.e. ROCE) and the ratios relating to efficiency in asset management (i.e. FATR, TATR and WCTR) under Perason s simple correlation coefficient method, Speraman s rank correlation method and Kendall s correlation coefficient method of the selected public sector oil and gas companies in India during the study period from to

22 Table-6.8: Analysis of Correlation Coefficients between FATR, TATR and WCTR and ROCE of the selected Public Sector Oil and Gas Companies in India during the study period from to Compan y Correlation Co-efficient between FATR and ROCE Correlation Co-efficient between TATR and ROCE Correlation Co-efficient between WCTR and ROCE Pearson Spearma Kendall Pearso Spearman Kendall Pearson Spearm Kendall n n an ONGC ** 0.90** 0.76** IOCL (-)0.71* (-)0.65* (-)0.52* (-)0.16 (-)0.32 (-)0.14 (-) OIL BPCL (-)0.55 (-)0.50 (-) (-)0.59* HPCL (-)0.45 (-)0.43 (-) ** GAIL (-)0.47 (-)0.51 (-)0.37 (-)0.32 (-)0.24 (-) (-)0.05 (-)0.06 Source: Tables-6.1, 6.2, 6.3, 6.4, 6.5 and 6.6. Note: * Statistically Significant at 5% level and ** Statistically Significant at 1% level Analysis of Correlation between FATR and ROCE of the selected Public Sector Oil and Gas Companies in India A careful examination of Table-6.8 shows that out of 18 measures of correlation coefficients computed under three methods for the six selected public sector oil and gas companies in India, 6 correlation coefficients are found to be positive and 12 coefficients are negative. All the 6 positive correlation coefficients are proved to be statistically insignificant. Out of 12 negative coefficients, 3 are found to be statistically significant at 5% level and the remaining 9 are found to be statistically insignificant during the study period from to The study highlights that there are positive associations between FATR and ROCE in case of the companies ONGC and OIL and negative associtions in case of IOCL, BPCL, HPCL and GAIL during the study period. It is also revealed that the fixed assets turnover ratios in case of all the companies under study (except IOCL under all the three measures) have no significant influences on the overall corporate returns during the study period. 201

23 6.4.2 Analysis of Correlation between TATR and ROCE of the selected Public Sector Oil and Gas Companies in India From Table-6.8 it is seen that out of 18 correlation coefficients of the selected six companies 12 coefficients are found to be positive and the remaining 6 coefficients are negative during the study period from to Out of the 12 positive correlation coefficients, 4 are found to be statistically significant at 1% level and the remaining 8 coefficients are found statistically insignificant. All the 6 negative coefficients are found to be statistically insignificant during the study period. The study highlights that the total assets turnover ratio of ONGC (under all the three measures) and HPCL (under Pearson s measure) have the significant influences on the overall corporate returns during the study period. The study also explains that the total assets turnover ratios in case of all the companies under study (except ONGC under all the three measures and HPCL under Pearson s measure) have no significant influences on the overall corporate returns during the study period Analysis of Correlation between WCTR and ROCE of the selected Public Sector Oil and Gas Companies in India Table-6.8 highlights that out of 18 correlation coefficients of the selected public sector oil and gas companies in India 14 coefficients are found to be positive and 4 coefficients are found to be negative during the study period from to All the 14 positive correlation coefficients are found to be statistically insignificant during the study period. Out of 4 negative coefficients, only 1 is found to be statistically significant at 5% level and the remaining 3 are found to be statistically insignificant during the study period. The study also reveals that the working capital turnover ratios of all the companies under study (except BPCL under Pearson s measure) have no significant influences on the overall corporate returns during the study period. 202

24 Table-6.9: Analysis of Correlation Coefficients between ITR, DTR and CTR and ROCE of the selected Public Sector Oil and Gas Companies in India during the study period from to Compan y Correlation Co-efficient between ITR and ROCE Correlation Co-efficient between DTR and ROCE Correlation Co-efficient between CTR and ROCE Pearson Spearma Kendall Pearso Spearman Kendal Pearson Spearma Kendall n n l n ONGC 0.94** 0.95** 0.88** (-)0.51 (-)0.33 (-) IOCL (-) (-)0.41 (-)0.36 (-)0.24 (-)0.51 (-)0.43 (-)0.33 OIL (-)0.03 (-)0.51 (-) BPCL (-) (-)0.35 (-)0.49 (-)0.36 (-)0.60* (-)0.86** (-)0.72** HPCL GAIL (-)0.23 (-)0.23 (-)0.24 (-)0.37 (-)0.36 (-)0.33 (-)0.53 (-)0.43 (-)0.33 Source: Tables-6.1, 6.2, 6.3, 6.4, 6.5 and 6.6. Note: * Statistically Significant at 5% level and ** Statistically Significant at 1% level. Table-6.9 shows the degree of association or relationship between the measure of profitability (i.e. ROCE) and the ratios relating to efficiency in assets management (i.e. ITR, DTR and CTR) under Perason s simple correlation coefficient method, Speraman s rank correlation method and Kendall s correlation coefficient method of the selected public sector oil and gas companies in India during the study period from to Analysis of Correlation between ITR and ROCE of the selected Public Sector Oil and Gas Companies in India A careful examination of Table-6.9 reveals that out of 18 measures of correlation coefficients computed under three methods for the six selected public sector oil and gas companies in India, 13 correlation coefficients are found to be positive and 5 coefficients are negative. Out of 13 positive correlation coefficients, 3 are found to be statistically significant at 1% level and 10 are proved to be statistically insignificant. Out of 5 negative coefficients, all are found to be statistically insignificant during the study period from to The study also highlights that there are positive associations between ITR and ROCE in case of the companies ONGC, OIL and HPCL (under all the three measures), IOCL and BPCL (under Spearman s and Kendall s measures) and negative associtions in case of GAIL (under all the three measures) and IOCL and BPCL (under Pearson s measure) during the study period. It is 203

25 revealed that the inventory turnover ratios in case of all the companies under study (except ONGC under all the three measures) have no significant influences on the overall corporate returns during the study period Analysis of Correlation between DTR and ROCE of the selected Public Sector Oil and Gas Companies in India From Table-6.9 it is seen that out of 18 correlation coefficients of the selected six companies 5 coefficients are found to be positive and the remaining 13 coefficients are negative during the study period from to All the 5 positive coefficients are found to be statistically insignificant and all the 13 negative coefficients are also found to be statistically insignificant during the study period. The study highlights that the debtors turnover ratios are positive in case of the companies HPCL (under all the three measures) and OIL (under Pearson s and Spearman s measures) and negative in case of ONGC, IOCL, BPCL and GAIL (under all the three measures) and OIL (under Kendall s measure) during the study period. The study also reveals that the debtors turnover ratios in case of all the companies under study have no significant influences on the overall corporate returns during the study period Analysis of Correlation between CTR and ROCE of the selected Public Sector Oil and Gas Companies in India Table-6.9 highlights that out of 18 correlation coefficients of the selected public sector oil and gas companies in India 7 coefficients are found to be positive and 11 coefficients are found to be negative during the study period. All the 7 positive correlation coefficients are found to be statistically insignificant during the study period. Out of 11 negative coefficients, 1 is found to be statistically significant at 5% level, 2 are found to be statistically significant at 1% level and the remaining 8 are found to be statistically insignificant during the study period from to The study highlights that the cash turnover ratios are positive in case of the companies ONGC and HPCL (under all the three measures) and OIL (under Kendall s measure) and negative in case of IOCL, BPCL and GAIL (under all the three measures) and OIL (under Pearson s and Spearman s measures) during the study period. The study also reveals that the cash turnover ratios of all the companies under study (except BPCL under all the three measures) have no significant influences on the overall corporate returns during the study period. 204

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