Impact of Fixed Charges Payment on Operational Efficiency of an Organization

Abstract

The operational efficiency aspect for any business is vital and must be considered by management to earn reliable and sustainable financial performance. Operational efficiency is the proficiency of a corporation to curtail the unwelcome and maximize resource capabilities to deliver quality products and services to customers. Indian has experienced significant transformations since the inception of Bombay Securities exchange in terms of growth due to local and foreign direct investment such that it has emerged fourth in sub-Saharan Africa and one of the most active securities markets in the whole of India. Besides the stable profitability the market has brought to the various listed firms, it has also contributed to the stability of the financial market and economic development of India in general. As a result, the study of financial performance determinants, specifically operational efficiency, has provoked academic research, corporations’ management, financial market, and regulatory interests. The objective of this study was to examine the relationship between operational efficiency and the financial performance of firms listed at Tamilnadu and Kerala securities exchange. The study also used the other five control variables, which are: Financial leverage, Liquidity, Size of the firms, capital adequacy, and real interest rates, to also test whether they have a relationship with ROA of firms listed at the NSE. This study covered two years from 2018 to 2020. The descriptive research design was used, and secondary data were collected from the World Bank and the annual reports of firms listed at the NSE. Data were then analyzed using a regression analysis model and statistical software, namely: SPSS version 21 and Microsoft Excel 2010.