Testing of Dupont model for software and Training services Companies in India

 

Praveen Gujjar J1, Dr. T. Manjunatha2

1 Associate Professor, CMS Business School, Jain (Deemed-to-be University), Bengaluru.

2Professor and Head, Dept. of MBA, Visvesvaraya Technological University,

BDT College of Engineering, Davangere - 577 004, Karnataka, India.

*Corresponding Author E-mail: gujjarpraveen@gmail.com, tmmanju87@gmail.com

 

ABSTRACT:

Software and training services companies are considered to analyze the characteristics of Indian IT companies and to ascertain the patterns of the Return on Equity (ROE) for Indian IT companies using the DuPont model. We calculated return on equity using three factors DuPont model and five factors DuPont model. We found that there is a significant relationship between ROE, asset run over and profit margin. The results of the study can be compared with other foreign IT companies and also with startup IT companies to understand how Information Technology companies are operating and also to know how well it can generate revenue.

 

KEYWORDS: DuPont Analysis, ROE, Margin Ratios, Turn over Ratios, equity multiplier.

 

 

1. INTRODUCTION:

The Information Technology (IT) sector has been playing a vital role in strengthening the Indian economy. In order to compare and set benchmark, a financial statement analysis should be made of all companies. A financial statement is a collection of data organized according to logical and consistent accounting procedures. Generally the users of financial statements calculate return on equity to measure efficiency of the Management in utilizing the funds and creating profit an increasing return on equity can suggest that the company is able to grow profits without adding new equity into the business, which dilutes the ownership share of existing shareholders. The higher a company’s return on equity, the better management is at employing investors’ capital to generate profits. The use of financial ratios by financial analysts, lenders, academic researchers, and small business owners has been widely acknowledged in the literature.

 

In the context of the Information Technology (IT), it takes into account the path of their progress. IT Company is classified as consulting software, software product, networking equipment and training services. The present paper studies the characteristics of Indian software and training services companies by using three-factor DuPont and Five factor (Extended) DuPont model. It proposes to study DuPont model of Indian IT companies listed on Bombay Stock Exchange (BSE), India. The paper is organized as follows: it reviews the related literature, followed by a discussion of objectives and methodology and data used in the study. Subsequently, it discusses the results, and finally, offers the conclusion.

 

Literature Review:

The research on financial performance analysis has been undertaken by Beaver (1977), Bird and Foster (1978). Therefore analysts can obtain useful information by analyzing company's recent financial statements and comparing the results with other companies. Making meaningful comparisons may not be possible only with traditional financial ratios. Hence novel technique of financial statement analysis is required for widely diversified companies. One of the novel techniques is DuPont analyses where investors and owners can see a comprehensive picture of firm performance. F. Donaldson Brown was the founder of the DuPont equation in 1914. This model provides the comparison of return in similar firms using Return on Equity (ROE). The studies conducted by Warker (1971) found that DuPont helps the top management to take appropriate decision. Osteryounget.al (1992) found that the Return on Assets (ROA) and Return on Equity (ROE) are important for understanding the profitability of a business enterprise. Hawawini and Viallet (1999) offered modification to the DuPont model resulted in five different ratios that combine to form ROE. Cincaet.al. (2005) proved that the size of the company and the country where the company is located impact the financial ratio structure. Hongquan (2011) claimed that neither traditional nor improved DuPont financial indicators have significant incremental information content in predicting the company's future earnings. Kabajehet.al (2012) revealed a positive relationship between ROA, ROE, return on investment and market price of shares. Manjunatha and Gujjar (2018) analyzed that net income of the organization is not enough to determine its efficiency unless profit margin, asset turnover, financial leverage are taken into consideration. Manjunatha and Gujjar (2018) Extended DuPont model can be used to measure the performance of Information Technology. Manjunatha and Gujjar (2018) DuPont model can be used to measure the performance of software and networking companies and there is a positive relationship between profit margin, asset turnover and ROE.This study has been taken up to test three factors DuPont model and five factors DuPont model which are affecting ROE. The main objective of the study will help the investors to understand how three factors DuPont model and Extended DuPont model should be used to analyze the financial position of a firm. The following paragraph outlines the objectives and hypotheses for the study of three factors DuPont model and Extended DuPont model to judge the performance of Indian IT companies.

 

2. OBJECTIVES AND METHODOLOGY:

2.1    We have set following objectives:

We have set following objectives based on the evidence Fairfield and Yohn (2001), Ross et al., (1996).

·       To analyze the characteristics of Indian IT Software product and training services companies.

·       To ascertain the patterns of the ROE for Indian IT Software product and training services companies using the DuPont model.

 

2.2    Hypotheses:

Based on the available evidence on NiharKiranNanavathi (2013) and Tiwari and Parray (2012) the following null hypotheses are formulated

Ho:   There is no significant relationship between ROE and net profit margin.

Ho:   There is no significant relationship between ROE and asset turn over.

 

Negations of above hypothesis are alternate hypothesis. We propose to test the above hypotheses in the Indian context by taking the data and sample described below.

 

2.3 Data and Methodology:

This study proposes to apply and analyze DuPont Model for Indian IT Software product and training services companies. Though we have collected 146 IT companies’ financial statements from capital market line, then finally we selected 102 companies for the analysis. The criteria for selection of these companies are i) Companies Traded in Indian stock exchanges for a minimum period of ten years. ii) Companies Financial statements are available for a minimum period of ten years continuously during study period. Present study was based on the Fifty two IT companies in India. For the study purpose we have taken Ten years financial statement viz 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015 and 2016 of 52 IT Software Products and Training services companies. The reason for selection of study period from 2007 to 2016 is global financial crisis started in the year 2007 and also considering the criteria which were mentioned above. The annual data of the selected companies is obtained from the Capital Line Database. We have adopted methodology as done by Moyer et al., (2007), and Ross et al., (2008). To test the hypothesis we used Panel data regression in R Studio. We calculated ROE using following model.

 

Three Step DuPont Analysis Model

ROE = (Net Profit Margin x (Asset Turnover) x (Equity Multiplier)          (1)

 

We have applied 5 factors DuPont Analysis for the Calculation of ROE.

 

Extended DuPont Analysis Model

ROE = (Tax Burden) x (Interest Burden) x (Operating Margin) x (Asset Turnover) x (Equity Multiplier)

 

3. RESULTS AND ANALYSIS:

We have analyzed ten years data of selected companies for the study period. To analyze the characteristics of Indian IT Software product and training services companies and also to ascertain the patterns of the ROE for Indian IT Software product and training services companies using the DuPont model. Main findings of the study are discussed in the following paragraphs.

 

Table 1 shows net profit margin characteristics of IT software products and training services companies for the study period 2007 to 2016 it was found that mean varies between - 30.183 to 0.535; standard deviation varies between 0.012894 to 95.50676; variance varies between 0.000166 to 9121.541; median varies between -0.65 to 0.535; skewness varies between -3.16228 to 3.089455; kurtosis varies between -1.72152 to 10.

 

Table 1: Net profit margin statistical characteristics of IT software products and Training services companies’ from 2007 to 2016

Company Name

Mean

Standard

Deviation

Variance

Median

Max

Min

Skewness

Kurtosis

Tata Elxsi

0.111

0.041218

0.001699

0.125

0.17

0.03

-0.71975

0.243978

TechnvisionVen

0.032

0.036148

0.001307

0.03

0.07

-0.03

-0.32534

-1.33493

Genesys Intl

0.229

0.158986

0.025277

0.165

0.48

0.07

0.612059

-1.42421

NetlinkSolns

0.25

0.294769

0.086889

0.135

0.67

-0.13

0.454081

-1.5126

Pan India Corpor

-2.406

27.66963

765.6083

-0.255

54.49

-61.76

-0.16992

4.187818

Cranes Software

-2.197

2.824241

7.976334

-0.65

0.36

-6.54

-0.57856

-1.72152

Avance Tech

-0.0064

0.012894

0.000166

0.001

0.001

-0.04

-2.30897

5.869308

CressandaSolns

-1.674

4.378973

19.1754

-0.13

0.38

-14

-3.03983

9.397905

Mindteck

0.08

0.04714

0.002222

0.085

0.16

0.01

0.262513

-0.49066

R S Software

0.086

0.05379

0.002893

0.085

0.18

0.01

0.318701

-0.87096

Elnet Technology

0.239

0.021833

0.000477

0.24

0.27

0.2

-0.3219

-0.58557

Trigyn Techno

0.2521

0.239782

0.057495

0.22

0.83

0.001

1.621303

3.579043

Kellton Tech

-0.587

1.738614

3.022779

0.125

0.2

-5.37

-2.82762

8.215376

Mastek

0.084

0.069314

0.004804

0.075

0.18

-0.01

0.147841

-1.39684

Svam Software

-0.004

0.068832

0.004738

0.005

0.06

-0.19

-2.55355

7.548135

Datasoft Application

0.535

0.191964

0.03685

0.535

0.75

0.14

-0.93154

0.559162

BITS

-2.04

4.489095

20.15198

-0.075

0.39

-13.03

-2.15187

3.980276

Dion Global

-0.465

0.431412

0.186117

-0.255

-0.03

-1.35

-1.06323

0.411978

Odyssey Tech

0.071

0.361246

0.130499

0.19

0.29

-0.9

-2.58576

7.167293

Mangalya Soft

-0.218

0.102068

0.010418

-0.25

0.07

-0.27

3.061615

9.535836

CLIO Infotech

0.316

0.581745

0.338427

0.175

1.45

-0.34

0.763532

-0.08523

Ram Info

-2.473

6.931497

48.04565

0.025

0.22

-22.01

-3.05685

9.466136

Nihar Info Glob

-1.907

3.850524

14.82653

-0.155

0.42

-11.93

-2.37291

5.828757

Virtualsoft Sys

-1.19

2.675307

7.157267

-0.425

0.54

-8.69

-2.9863

9.200984

ABM Knowledge

0.174

0.047889

0.002293

0.18

0.22

0.06

-1.59891

3.187015

Nucleus Soft

0.189

0.056263

0.003166

0.18

0.28

0.12

0.706888

-0.57163

B2B Soft.Tech

-0.052

0.287046

0.082396

0.055

0.19

-0.79

-2.22587

5.426606

Advent Computer

-0.388

0.61026

0.372418

-0.14

0.04

-1.9

-1.99664

4.14267

CG-VAK Software

0.002

0.09716

0.00944

0.02

0.11

-0.18

-0.82829

-0.4676

Ace Soft

0.107

0.107399

0.011534

0.1

0.36

-0.08

1.061701

4.406231

Nimbus Foods

-30.183

95.50676

9121.541

0.02

0.03

-302

-3.16228

10

PrithviSoftech

0.25

0.052915

0.0028

0.245

0.37

0.17

1.079898

2.699405

Silicon Valley

0.089

0.596964

0.356366

-0.055

1.23

-0.41

1.437197

0.826213

PFL Infotech

-1.503

6.029588

36.35593

0.47

0.71

-18.65

-3.15299

9.956686

Panoramic Univ

0.36

0.068475

0.004689

0.375

0.44

0.25

-0.68001

-0.6331

IEC Education

0.098

0.088794

0.007884

0.105

0.21

-0.03

-0.22778

-1.63093

Twinstar Indus

0.0322

0.069947

0.004893

0.01

0.23

0.001

3.089455

9.648019

Polaris Consulta

0.083

0.028694

0.000823

0.09

0.13

0.04

-0.1291

-0.70346

Cybermate Info

-0.6598

1.726372

2.98036

0.0255

0.5

-4.98

-2.22136

4.570326

Intense Tech

-0.28

0.607417

0.368956

0.025

0.24

-1.36

-1.22666

-0.04321

Danlaw Tech

-0.143

0.548595

0.300957

-0.005

0.15

-1.69

-3.05335

9.505423

Cura Tech

-0.249

0.919619

0.845699

0.03

0.33

-2.77

-2.76939

8.069195

Softsol India

0.261

0.191337

0.03661

0.27

0.57

0.01

0.243095

-1.2287

Subex

-0.07

0.270719

0.073289

-0.06

0.33

-0.56

-0.52846

0.121283

Virgo Global

-0.291

1.24984

1.562099

0.1

0.8

-3.67

-2.59873

7.488795

Hit Kit Global

-0.162

0.580456

0.336929

-0.025

0.28

-1.78

-2.91446

8.929938

Kanika Infra

-0.106

0.208923

0.043649

0

0.01

-0.64

-2.2597

5.161752

Virinchi

0.082

0.065625

0.004307

0.06

0.24

0.02

1.791414

3.423731

Firstobj.Tech

0.0181

0.069222

0.004792

0.0205

0.09

-0.12

-0.82448

0.248921

California Soft.

-0.709

0.925652

0.856832

-0.225

0.12

-2.31

-0.8091

-1.04464

Usha Mart. Edu.

-0.135

0.722699

0.522294

0.075

0.45

-2.08

-2.57955

7.26179

NIIT

0.018

0.109016

0.011884

0.06

0.11

-0.27

-2.39618

6.47358

Birla Shloka

-0.083

0.206669

0.042712

0.015

0.06

-0.51

-1.73985

1.497042

JetkingInfotrai

0.142

0.085739

0.007351

0.13

0.27

0.03

0.336044

-1.41375

Compucom Soft

0.157

0.043982

0.001934

0.15

0.24

0.1

0.868385

0.188581

Aptech

0.129

0.124495

0.015499

0.135

0.37

-0.08

0.273202

0.719095

 

Table 2 shows Asset turn over characteristics of IT Consulting Software and Networking companies for the study period 2007 to 2016 it was found that asset turn over mean varies between 0.011 to 2.899; standard deviation varies between 0.003162 to 3.830528; variance varies between 0.00001 to 14.67294; median varies between 0.01 to 2.79; skewness varies between -1.42 to 1.81; kurtosis varies between -2.04321 to 10.

 

Table 2: Asset turnoverstatistical characteristics of IT software products and training services companies’ from 2007 to 2016

Company Name

Mean

Standard

Deviation

Variance

Median

Max

Min

Skewness

Kurtosis

Tata Elxsi

2.548

0.511051

0.261173

2.47

3.33

1.81

0.272772

-0.78315

TechnvisionVen

0.274

0.064498

0.00416

0.26

0.38

0.21

0.617068

-1.22254

Genesys Intl

0.643

0.318261

0.10129

0.655

1.19

0.22

0.514297

-0.23603

NetlinkSolns

0.179

0.117327

0.013766

0.125

0.38

0.08

1.093236

-0.18816

Pan India Corpor

0.032

0.057697

0.003329

0.01

0.19

-0.01

2.743685

8.03584

Cranes Software

0.135

0.118626

0.014072

0.105

0.3

0.01

0.533146

-1.56197

Avance Tech

1.254

1.398636

1.956182

0.435

3.57

0.23

1.028419

-1.06278

CressandaSolns

0.3851

0.340927

0.116231

0.29

0.85

0.001

0.240162

-1.85285

Mindteck

0.465

0.161125

0.025961

0.41

0.89

0.32

2.369428

6.440964

R S Software

2.899

1.264221

1.598254

2.79

4.97

0.86

0.20223

-0.39771

Elnet Technology

0.39

0.041366

0.001711

0.38

0.48

0.34

1.071378

1.366221

Trigyn Techno

0.596

0.360222

0.12976

0.38

1.3

0.25

0.953116

-0.36399

Kellton Tech

0.377

0.232668

0.054134

0.345

0.76

0.13

0.327592

-1.55032

Mastek

1.549

0.369938

0.136854

1.565

2.04

1.02

-0.07546

-1.45133

Svam Software

0.519

0.321643

0.103454

0.565

1.1

0.02

-0.16162

0.571092

Datasoft Application

0.078

0.02201

0.000484

0.08

0.13

0.04

1.097286

4.411019

BITS

0.03

0.02582

0.000667

0.015

0.08

0.01

0.968246

-0.39107

Dion Global

0.14

0.059815

0.003578

0.13

0.29

0.07

1.89639

4.806226

Odyssey Tech

1.621

0.630352

0.397343

1.41

2.84

0.91

0.867852

-0.24601

Mangalya Soft

0.011

0.003162

0.00001

0.01

0.02

0.01

3.162278

10

CLIO Infotech

0.038

0.045412

0.002062

0.04

0.14

-0.04

0.838592

3.170855

Ram Info

0.821

0.747268

0.55841

0.43

2.03

0.13

0.552057

-1.70186

Nihar Info Glob

0.157

0.090683

0.008223

0.12

0.29

0.06

0.76276

-1.33617

Virtualsoft Sys

1.016

1.345248

1.809693

0.62

4.58

0.12

2.462172

6.565029

ABM Knowledge

1.477

0.426095

0.181557

1.51

2.03

0.78

-0.31475

-1.16502

Nucleus Soft

0.876

0.173282

0.030027

0.795

1.14

0.69

0.705178

-1.40691

B2B Soft.Tech

0.938

0.318601

0.101507

1.11

1.26

0.43

-0.55477

-1.70324

Advent Computer

0.022

0.014757

0.000218

0.02

0.06

0.01

2.167728

5.561745

CG-VAK Software

0.88

0.284136

0.080733

0.775

1.28

0.5

0.21339

-1.75107

Ace Soft

0.409

0.161276

0.02601

0.39

0.69

0.2

0.43047

-0.83336

Nimbus Foods

1.066

0.528629

0.279449

0.98

1.69

0.01

-0.59442

0.209711

PrithviSoftech

0.405

0.0538

0.002894

0.41

0.49

0.33

0.050839

-0.96364

Silicon Valley

0.487

1.141101

1.302112

0.3

2.82

-1.42

0.529625

1.408336

PFL Infotech

0.089

0.103113

0.010632

0.06

0.38

0.03

3.063044

9.546648

Panoramic Univ

0.218

0.056135

0.003151

0.205

0.33

0.14

0.782233

0.446478

IEC Education

0.198

0.106437

0.011329

0.18

0.35

0.05

0.19464

-1.47191

Twinstar Indus

1.693

1.02347

1.04749

1.35

3.26

0.49

0.441697

-1.30519

Polaris Consulta

1.855

0.537675

0.289094

1.59

2.89

1.49

1.697672

1.246118

Cybermate Info

0.248

0.266074

0.070796

0.14

0.96

0.08

2.548185

6.967443

Intense Tech

0.54

0.252631

0.063822

0.515

0.85

0.19

-0.10802

-1.66331

Danlaw Tech

0.349

0.098031

0.00961

0.34

0.5

0.22

0.157525

-1.66376

Cura Tech

0.177

0.097417

0.00949

0.17

0.31

0.07

0.106059

-2.04321

Softsol India

0.126

0.068993

0.00476

0.095

0.28

0.07

1.52535

1.648907

Subex

0.296

0.110172

0.012138

0.295

0.43

0.13

-0.34155

-1.23799

Virgo Global

0.057

0.034657

0.001201

0.045

0.15

0.03

2.557637

7.113617

Hit Kit Global

0.162

0.204277

0.041729

0.065

0.67

0.02

2.094887

4.301215

Kanika Infra

1.137

0.861717

0.742557

1.28

2.3

0.03

-0.11269

-1.55903

Virinchi

0.562

0.159151

0.025329

0.53

0.88

0.39

1.042179

0.39106

Firstobj.Tech

0.944

0.477172

0.227693

0.935

1.55

0.07

-0.43186

-0.56526

California Soft.

0.403

0.121568

0.014779

0.405

0.6

0.18

-0.16932

0.162912

Usha Mart. Edu.

0.25

0.251396

0.0632

0.155

0.62

0.01

0.732355

-1.37519

NIIT

0.97

0.311947

0.097311

1.03

1.48

0.43

-0.63903

0.657056

Birla Shloka

2.581

3.830528

14.67294

1.7

12.89

0.04

2.578378

7.241552

JetkingInfotrai

1.249

0.684421

0.468432

0.935

2.45

0.55

0.75496

-1.01535

Compucom Soft

0.444

0.0667

0.004449

0.46

0.53

0.35

-0.2177

-1.60353

Aptech

0.577

0.193967

0.037623

0.525

0.94

0.37

0.790827

-0.43965

 

Table 3 Shows equity multiplier characteristics of IT Consulting Software and Networking companies for the study period 2007 to 2016 it was found that equity multiplier mean varies between -0.792 to 5.415; standard deviation varies between 0.000422 to 10.86982; variance varies between 0.00 to 118.1529; median varies between -0.39 to 3.85; skewness varies between -1.03959 to 3.162278; kurtosis varies between -2.30003 to 10.

 

Table 3: Equity multiplierstatistical characteristics of IT software products and training services companies’ from 2007 to 2016

Company Name

Mean

Standard

Deviation

Variance

Median

Max

Min

Skewness

Kurtosis

Tata Elxsi

1.16

0.151731

0.023022

1.135

1.47

1

0.984061

0.397611

TechnvisionVen

1.311

0.070309

0.004943

1.335

1.42

1.19

-0.48932

-0.34191

Genesys Intl

1.067

0.045959

0.002112

1.075

1.13

1

-0.27419

-1.08599

NetlinkSolns

1.007

0.011595

0.000134

1

1.03

1

1.261585

-0.06762

Pan India Corpor

1.012

0.015492

0.00024

1

1.03

1

0.484123

-2.27679

Cranes Software

1.871

10.86982

118.1529

2.185

27.88

-13.12

1.388821

3.812663

Avance Tech

1.144

0.328742

0.108071

1.015

2.07

1

3.044363

9.439428

CressandaSolns

2.833

4.34522

18.88093

1.285

15.08

1

3.051695

9.470902

Mindteck

1.053

0.093101

0.008668

1.01

1.31

1.01

2.838202

8.394357

R S Software

1.238

0.351119

0.123284

1.045

1.88

1.02

1.444571

0.428903

Elnet Technology

1.599

0.29282

0.085743

1.485

2.17

1.33

1.145604

0.156191

Trigyn Techno

1.0002

0.000422

1.78E-07

1

1.001

1

1.778781

1.40625

Kellton Tech

1.125

0.1596

0.025472

1.06

1.48

1

1.306666

1.493324

Mastek

1.037

0.03802

0.001446

1.03

1.1

1

0.440618

-1.40028

Svam Software

1.002

0.004216

1.78E-05

1

1.01

1

1.778781

1.40625

Datasoft Application

1.048

0.046857

0.002196

1.025

1.11

1

0.570586

-1.76546

BITS

1.028

0.04341

0.001884

1.005

1.11

1

1.381757

0.307338

Dion Global

4.465

3.700385

13.69285

2.65

11.7

1.37

0.952239

-0.2983

Odyssey Tech

1.519

0.872715

0.761632

1.2

3.76

1.01

2.341776

5.37828

Mangalya Soft

1.001

0.003162

0.00001

1

1.01

1

3.162278

10

CLIO Infotech

1.147

0.37789

0.142801

1.04

2.22

1

3.134829

9.872923

Ram Info

2.548

4.323118

18.68935

1.08

14.84

1.03

3.151007

9.947098

Nihar Info Glob

2.092

1.755922

3.083262

1.16

5.51

1.08

1.673372

1.179963

Virtualsoft Sys

-0.792

0.826677

0.683396

-0.39

-0.15

-2.17

-1.03959

-0.99262

ABM Knowledge

1.008

0.025298

0.00064

1

1.08

1

3.162278

10

Nucleus Soft

1.015

0.014337

0.000206

1.015

1.03

1

-2.9E-14

-2.24084

B2B Soft.Tech

1.007

0.012517

0.000157

1

1.04

1

2.405306

6.336416

Advent Computer

1.049

0.009944

9.89E-05

1.045

1.06

1.04

0.237277

-2.30003

CG-VAK Software

1.187

0.124191

0.015423

1.235

1.32

1.01

-0.36817

-1.78106

Ace Soft

0.882

0.043919

0.001929

0.885

0.96

0.81

0.363572

0.209805

Nimbus Foods

1.107

0.09464

0.008957

1.06

1.29

1.04

1.211635

-0.22881

PrithviSoftech

1.009

0.02846

0.00081

1

1.09

1

3.162278

10

Silicon Valley

1.205

0.283284

0.08025

1.12

2.01

1.08

3.143883

9.915915

PFL Infotech

1.017

0.018288

0.000334

1.015

1.04

1

0.144424

-2.26516

Panoramic Univ

1.58

0.168391

0.028356

1.565

1.95

1.37

1.077876

1.677489

IEC Education

1.088

0.050509

0.002551

1.075

1.21

1.05

1.795588

3.478335

Twinstar Indus

1.188

0.286232

0.081929

1.015

1.87

1

1.738437

3.007772

Polaris Consulta

1.023

0.045959

0.002112

1

1.11

1

1.759284

1.363124

Cybermate Info

1.037

0.023118

0.000534

1.035

1.09

1

1.06297

3.213327

Intense Tech

1.032

0.023944

0.000573

1.04

1.07

1

-0.3545

-0.78286

Danlaw Tech

1.039

0.056853

0.003232

1.005

1.15

1

1.244284

0.047006

Cura Tech

1.384

0.407273

0.165871

1.17

2.07

1

1.053489

-0.42503

Softsol India

1.014

0.012649

0.00016

1.02

1.03

1

-0.13176

-1.86756

Subex

2.837

0.814453

0.663334

2.86

3.82

1.25

-0.66533

-0.03529

Virgo Global

5.415

3.505894

12.29129

3.85

14.94

3.64

2.696311

7.629341

Hit Kit Global

1.0002

0.000422

1.78E-07

1

1.001

1

1.778781

1.40625

Kanika Infra

1.0002

0.000422

1.78E-07

1

1.001

1

1.778781

1.40625

Virinchi

1.151

0.068872

0.004743

1.165

1.29

1.06

0.542882

0.555461

Firstobj.Tech

1.028

0.023476

0.000551

1.025

1.06

1

0.234456

-1.61185

California Soft.

2.387

5.368553

28.82136

1.63

16.83

-2.71

2.5219

7.333148

Usha Mart. Edu.

1.031

0.056065

0.003143

1

1.17

1

2.066495

4.163574

NIIT

1.377

0.172243

0.029668

1.35

1.64

1.15

0.401341

-1.18783

Birla Shloka

1.264

0.303871

0.092338

1.205

2.09

1.03

2.651648

7.719231

JetkingInfotrai

1.071

0.070309

0.004943

1.065

1.23

1

1.260981

2.159609

Compucom Soft

1.38

0.223706

0.050044

1.375

1.69

1

-0.30556

-0.77751

Aptech

1.066

0.07905

0.006249

1.015

1.24

1.01

1.335967

1.232691

 

Table 4shows tax burden characteristics of IT Consulting Software and Networking companies for the study period 2007 to 2016 it was found that tax burden mean varies between -0.147 to 1.765; standard deviation varies between 0.000422 to 3.087507; variance varies between 0.00 to 9.532699; median varies between 0.555 to 1.03; skewness varies between -3.04427 to 3.147906; kurtosis varies between -2.19508 to 9.930914.

 

Table 4: Tax burdenstatistical characteristics of IT software products and training services companies’ from 2007 to 2016

Company Name

Mean

Standard

Deviation

Variance

Median

Max

Min

Skewness

Kurtosis

Tata Elxsi

0.795

0.149833

0.02245

0.765

1.02

0.65

0.328873

-1.88776

TechnvisionVen

0.611

0.442429

0.195743

0.78

1

-0.5

-2.00375

4.608157

Genesys Intl

0.917

0.067338

0.004534

0.915

1.01

0.8

-0.09891

-0.54473

NetlinkSolns

0.902

0.193781

0.037551

0.925

1.18

0.5

-0.96697

1.18043

Pan India Corpor

1.119

0.367467

0.135032

1

1.83

0.8

1.639185

1.1972

Cranes Software

0.712

0.23093

0.053329

0.75

0.96

0.3

-0.58976

-0.9217

Avance Tech

0.787

0.216438

0.046846

0.81

1

0.45

-0.2792

-1.85646

CressandaSolns

1.092

0.500906

0.250907

1

2.47

0.65

2.757294

8.323982

Mindteck

0.731

0.177979

0.031677

0.71

0.97

0.47

0.035271

-1.51629

R S Software

0.771

0.094921

0.00901

0.785

0.97

0.67

0.829808

0.711426

Elnet Technology

0.657

0.011595

0.000134

0.655

0.68

0.64

0.727015

0.511967

Trigyn Techno

0.815

0.298747

0.08925

0.96

1

0.04

-2.28181

5.706786

Kellton Tech

-0.049

2.084304

4.344321

0.915

1.03

-4

-1.77059

1.389513

Mastek

0.887

0.32156

0.103401

0.93

1.54

0.24

-0.0153

3.019443

Svam Software

-0.147

2.80286

7.856023

0.555

2

-8

-2.96891

9.196899

Datasoft Application

1.0011

0.003143

9.88E-06

1

1.01

1

3.106264

9.721632

BITS

0.824

0.782449

0.612227

0.965

1.5

-1.21

-2.24517

5.913139

Dion Global

1.016

0.030984

0.00096

1

1.09

0.99

1.897269

3.264819

Odyssey Tech

0.933

0.121568

0.014779

1

1.04

0.67

-1.59559

1.568271

Mangalya Soft

1.0002

0.000422

1.78E-07

1

1.001

1

1.778781

1.40625

CLIO Infotech

0.783

0.496254

0.246268

0.925

1.38

-0.5

-2.13061

5.893406

Ram Info

0.968

0.324921

0.105573

1

1.33

0.11

-2.29266

6.692512

Nihar Info Glob

1.765

2.326348

5.411894

1

8.2

0.38

2.869435

8.494408

Virtualsoft Sys

1.005

0.008498

7.22E-05

1

1.02

1

1.357727

0.106509

ABM Knowledge

0.646

0.058916

0.003471

0.66

0.68

0.48

-3.04427

9.46064

Nucleus Soft

0.862

0.096356

0.009284

0.855

0.98

0.74

0.049146

-1.73246

B2B Soft.Tech

0.992

0.016193

0.000262

1

1.01

0.96

-1.18536

0.209607

Advent Computer

1.0021

0.006297

3.97E-05

1

1.02

1

3.147906

9.930914

CG-VAK Software

0.859

0.24933

0.062166

0.87

1.2

0.3

-1.09649

2.216183

Ace Soft

0.979

0.041753

0.001743

0.99

1.03

0.88

-1.6408

3.266841

Nimbus Foods

0.696

0.112763

0.012716

0.665

1

0.61

2.574262

7.352797

PrithviSoftech

0.712

0.071305

0.005084

0.685

0.84

0.64

0.812674

-0.71176

Silicon Valley

0.948

0.121179

0.014684

1

1

0.62

-2.69941

7.450225

PFL Infotech

0.94

0.325372

0.105867

0.97

1.75

0.64

1.840489

4.443297

Panoramic Univ

0.788

0.125857

0.01584

0.765

1

0.65

0.409749

-1.37913

IEC Education

0.793

0.171338

0.029357

0.84

1.05

0.45

-0.72796

0.688599

Twinstar Indus

1.012

0.591078

0.349373

1

2.3

0.16

0.990366

1.893702

Polaris Consulta

0.791

0.106087

0.011254

0.82

0.88

0.53

-1.90717

3.998211

Cybermate Info

0.899

0.172463

0.029743

0.93

1.2

0.64

-0.11345

-0.20874

Intense Tech

1.019

0.18248

0.033299

0.955

1.47

0.85

2.056555

4.225167

Danlaw Tech

0.519

3.087507

9.532699

0.705

5.8

-7

-1.30531

5.208287

Cura Tech

0.798

0.128737

0.016573

0.77

0.99

0.57

-0.04068

-0.23884

Softsol India

0.816

0.198841

0.039538

0.805

1.29

0.54

1.372483

3.73614

Subex

1.037

0.117667

0.013846

1.03

1.24

0.8

-0.19363

1.675896

Virgo Global

1.384

1.632763

2.665916

1

6

0.5

3.082195

9.641677

Hit Kit Global

0.423

1.270442

1.614023

0.845

1.33

-3

-2.63443

7.270199

Kanika Infra

0.772

0.145663

0.021218

0.73

1

0.6

0.302892

-1.57548

Virinchi

0.805

0.13501

0.018228

0.835

0.96

0.63

-0.18201

-2.05745

Firstobj.Tech

0.699

0.490701

0.240788

0.855

1.18

-0.42

-1.59028

2.265651

California Soft.

0.938

0.254899

0.064973

1

1.46

0.57

0.44075

1.057908

Usha Mart. Edu.

0.924

0.094304

0.008893

0.99

1

0.8

-0.49236

-2.19508

NIIT

1.042

1.125658

1.267107

0.8

4.12

0.14

2.693356

8.035069

Birla Shloka

0.888

0.218266

0.04764

0.96

1.2

0.44

-0.83761

0.799556

JetkingInfotrai

0.685

0.047199

0.002228

0.685

0.74

0.62

-0.23379

-1.53552

Compucom Soft

0.756

0.089219

0.00796

0.735

0.9

0.65

0.55

-1.16994

Aptech

0.756

0.387103

0.149849

0.82

1.13

-0.29

-2.56028

7.535225

 

Table 5shows interest burden characteristics of IT Consulting Software and Networking companies for the study period 2007 to 2017 it was found that Interest Burden mean varies between -1.979 to 30.187; standard deviation varies between 0.000316 to 85.58102; variance varies between 0.000 to 7324.111; median varies between -2 to 1.32; skewness varies between -2.69251 to 3.162278.; kurtosis varies between -1.86282 to 10.

 

Table 5: Interest burdenstatistical characteristics of IT software products and training services companies’ from 2007 to 2016

Company Name

Mean

Standard

Deviation

Variance

Median

Max

Min

Skewness

Kurtosis

Tata Elxsi

0.747

0.117667

0.013846

0.75

0.91

0.53

-0.49439

-0.21179

TechnvisionVen

1.001

1.599802

2.559366

0.55

5.5

-0.12

3.015922

9.37695

Genesys Intl

0.648

0.236211

0.055796

0.62

0.95

0.34

-0.00943

-1.7295

NetlinkSolns

0.768

0.366297

0.134173

0.89

1.43

0.33

0.216479

-0.70163

Pan India Corpor

1.405

0.999525

0.99905

1.21

3.33

-0.43

0.269158

1.402786

Cranes Software

3.548

6.979678

48.71591

1.32

21.73

-2.46

2.342506

5.928553

Avance Tech

-0.22

2.650945

7.027511

0.945

1.6

-5.67

-1.76726

1.53305

CressandaSolns

1.232

1.69035

2.857284

1

5.8

-0.52

2.546883

7.583831

Mindteck

0.742

0.149577

0.022373

0.725

0.96

0.57

0.215387

-1.86282

R S Software

0.67

0.280119

0.078467

0.765

0.94

0.13

-0.87663

-0.3309

Elnet Technology

0.645

0.0538

0.002894

0.64

0.71

0.57

-0.099

-1.60138

Trigyn Techno

0.835

0.183742

0.033761

0.865

1.01

0.36

-2.17329

5.728025

Kellton Tech

0.675

0.336559

0.113272

0.745

1.17

0.06

-0.47815

0.066016

Mastek

0.486

0.416018

0.173071

0.61

0.82

-0.29

-1.48094

0.809904

Svam Software

0.525

0.321049

0.103072

0.61

0.88

0.07

-0.49602

-1.50592

Datasoft Application

1.0001

0.000316

1E-07

1

1.001

1

3.162278

10

BITS

-0.608

9.932951

98.66351

0.85

10.33

-27

-2.35335

6.935893

Dion Global

-1.979

7.308886

53.41981

-0.745

8.74

-18.92

-1.32864

3.156206

Odyssey Tech

0.703

0.580346

0.336801

0.87

1.24

-0.88

-2.67802

7.921386

Mangalya Soft

-1.636

1.616053

2.611627

-2

1.5

-3

0.8071

-0.35652

CLIO Infotech

0.921

0.315223

0.099366

0.99

1.31

0.24

-1.03031

1.529115

Ram Info

0.691

0.344495

0.118677

0.665

1.17

0.07

-0.42199

-0.21295

Nihar Info Glob

0.525

1.828699

3.344139

0.99

3.25

-4

-1.63665

4.932466

Virtualsoft Sys

1.409

1.145876

1.313032

1.175

4.56

0.3

2.740049

8.34366

ABM Knowledge

0.969

0.028067

0.000788

0.97

1.03

0.93

0.692722

2.169913

Nucleus Soft

0.853

0.055388

0.003068

0.875

0.91

0.73

-1.35831

1.607266

B2B Soft.Tech

1.153

0.696277

0.484801

0.91

3

0.66

2.486688

6.610322

Advent Computer

1.062

1.229687

1.512129

0.865

3.5

-0.57

0.590962

0.360539

CG-VAK Software

0.051

1.771951

3.13981

0.37

3.02

-3.83

-0.91191

2.609665

Ace Soft

0.799

0.381763

0.145743

0.725

1.82

0.37

2.429056

7.196017

Nimbus Foods

0.551

0.227569

0.051788

0.555

1

0.19

0.415851

0.642196

PrithviSoftech

0.905

0.039791

0.001583

0.91

0.94

0.83

-1.21688

0.395568

Silicon Valley

1.204

0.5933

0.352004

1.095

2.44

0.42

0.96

1.138944

PFL Infotech

0.776

0.350149

0.122604

0.985

1

0.07

-1.28814

0.122331

Panoramic Univ

0.869

0.114061

0.01301

0.91

0.93

0.56

-2.69251

7.497299

IEC Education

0.341

0.398035

0.158432

0.415

0.8

-0.37

-0.8075

-0.34177

Twinstar Indus

0.458

0.255029

0.06504

0.415

0.95

0.13

0.627246

0.164536

Polaris Consulta

0.787

0.0965

0.009312

0.83

0.89

0.62

-0.64148

-1.21453

Cybermate Info

0.379

0.624881

0.390477

0.41

1.09

-0.99

-1.02862

1.550519

Intense Tech

1.043

0.747188

0.55829

0.88

2.8

0.16

1.408268

3.122345

Danlaw Tech

0.692

1.404341

1.972173

0.76

4

-1.6

1.166788

3.969838

Cura Tech

0.231

1.330584

1.770454

0.715

1.83

-2.98

-1.68393

3.63166

Softsol India

0.577

0.304852

0.092934

0.635

0.91

0.05

-0.57421

-1.0298

Subex

0.078

1.125342

1.266396

0.31

1.45

-2.07

-0.61604

-0.1621

Virgo Global

1.179

1.984666

3.938899

1

4

-3

-0.52673

1.766599

Hit Kit Global

0.543

0.789206

0.622846

0.67

1.5

-1.33

-1.5041

3.220292

Kanika Infra

0.913

1.81848

3.306868

0.22

4.88

-1.63

1.200623

1.790681

Virinchi

0.337

0.149

0.022201

0.3

0.65

0.18

1.24277

1.026165

Firstobj.Tech

0.615

1.662737

2.764694

0.435

4.75

-2.01

1.578202

5.370908

California Soft.

30.187

85.58102

7324.111

1.05

273

-0.74

3.127095

9.827969

Usha Mart. Edu.

1.143

1.066105

1.136579

0.815

4

0.33

2.53529

7.074478

NIIT

0.483

0.583706

0.340712

0.415

2.03

-0.02

2.375068

6.693866

Birla Shloka

-0.143

0.944058

0.891246

0.385

0.69

-1.78

-1.06477

-0.80025

JetkingInfotrai

0.718

0.203022

0.041218

0.775

0.91

0.26

-1.34014

1.843954

Compucom Soft

0.449

0.176664

0.03121

0.365

0.77

0.29

1.240445

0.23537

Aptech

1.858

4.274292

18.26957

0.74

13.95

-0.66

3.089033

9.680108

 

Table 6shows operating income margin characteristics of IT Consulting Software and Networking companies for the study period 2007 to 2017 it was found that operating income margin mean varies between -30.147 to 0.564; standard deviation varies between 0.014463 to 95.51941; variance varies between 0.000 to 9123.957; median varies between -0.345 to 0.7; skewness varies between -3.16228 to 3.108474; kurtosis varies between -1.97956 to 10.

 

Table 6: Operating income marginstatistical characteristics of IT software products and training services companies’ from 2007 to 2016

Company Name

Mean

Standard

Deviation

Variance

Median

Max

Min

Skewness

Kurtosis

Tata Elxsi

0.18

0.046188

0.002133

0.19

0.24

0.1

-0.58355

-0.662

TechnvisionVen

0.0751

0.055878

0.003122

0.075

0.15

0.001

0.054308

-1.97956

Genesys Intl

0.344

0.123126

0.01516

0.305

0.55

0.21

0.930253

-0.36606

NetlinkSolns

0.319

0.295088

0.087077

0.205

0.75

-0.09

0.32612

-1.50913

Pan India Corpor

-2.201

27.65479

764.7877

-0.17

54.39

-61.76

-0.20415

4.187492

Cranes Software

-0.586

1.62431

2.638382

-0.005

0.86

-3.45

-1.19305

0.100466

Avance Tech

-0.0035

0.014463

0.000209

0.001

0.01

-0.04

-2.01096

4.874331

CressandaSolns

-0.7119

1.753244

3.073865

-0.0145

0.6

-5.33

-2.44819

6.320123

Mindteck

0.142

0.070206

0.004929

0.145

0.26

0.05

0.462281

-0.71554

R S Software

0.161

0.058963

0.003477

0.15

0.29

0.09

1.302955

1.685296

Elnet Technology

0.564

0.027162

0.000738

0.565

0.61

0.52

0.053228

-0.52321

Trigyn Techno

0.284

0.235334

0.055382

0.255

0.84

0.01

1.420759

3.247481

Kellton Tech

-0.411

1.66996

2.788766

0.225

0.41

-5.01

-2.8383

8.266514

Mastek

0.134

0.072755

0.005293

0.115

0.26

0.04

0.491797

-0.76314

Svam Software

0.1002

0.147799

0.021845

0.035

0.41

0.001

1.62124

1.3232

Datasoft Application

0.535

0.191964

0.03685

0.535

0.75

0.14

-0.93154

0.559162

BITS

-1.914

4.508048

20.32249

-0.005

0.61

-12.98

-2.16137

4.048213

Dion Global

0.133

0.216695

0.046957

0.18

0.39

-0.29

-0.89232

0.079997

Odyssey Tech

0.155

0.331067

0.109606

0.235

0.39

-0.73

-2.49603

6.967229

Mangalya Soft

0.143

0.166336

0.027668

0.09

0.47

-0.17

0.174907

1.745102

CLIO Infotech

0.462

0.540304

0.291929

0.39

1.39

-0.28

0.184798

-0.59601

Ram Info

-2.346

6.805043

46.3086

0.125

0.3

-21.53

-3.0587

9.475811

Nihar Info Glob

-1.713

3.804422

14.47362

0.085

0.55

-11.57

-2.35354

5.659241

Virtualsoft Sys

-1.089

2.663496

7.09421

-0.345

0.57

-8.58

-3.02229

9.368786

ABM Knowledge

0.274

0.071833

0.00516

0.275

0.37

0.12

-0.88428

1.357387

Nucleus Soft

0.253

0.054171

0.002934

0.24

0.33

0.17

0.104009

-0.86194

B2B Soft.Tech

-0.029

0.28769

0.082766

0.075

0.22

-0.77

-2.22865

5.5015

Advent Computer

-0.194

0.432491

0.187049

-0.02

0.18

-1.2

-1.73666

2.632221

CG-VAK Software

0.106

0.082489

0.006804

0.13

0.21

-0.07

-1.13589

1.099618

Ace Soft

0.164

0.13721

0.018827

0.145

0.51

-0.05

1.693202

5.780189

Nimbus Foods

-30.147

95.51941

9123.957

0.06

0.07

-302

-3.16228

10

PrithviSoftech

0.388

0.056135

0.003151

0.38

0.47

0.29

-0.06577

-0.31316

Silicon Valley

0.119

0.566205

0.320588

-0.045

1.23

-0.4

1.533805

1.044596

PFL Infotech

-1.346

6.022589

36.27158

0.7

0.78

-18.47

-3.15089

9.946706

Panoramic Univ

0.536

0.089343

0.007982

0.555

0.64

0.36

-0.80613

0.000428

IEC Education

0.267

0.075137

0.005646

0.27

0.37

0.15

-0.07512

-1.09624

Twinstar Indus

0.042

0.069889

0.004884

0.02

0.24

0.01

3.108474

9.751228

Polaris Consulta

0.131

0.026437

0.000699

0.135

0.17

0.08

-0.54034

0.075328

Cybermate Info

-0.462

1.701103

2.893751

0.255

0.54

-4.72

-2.23779

4.578851

Intense Tech

-0.178

0.542808

0.29464

0.09

0.29

-1.18

-1.30456

0.214381

Danlaw Tech

-0.12

0.676215

0.457267

0.055

0.24

-2.03

-3.07215

9.592403

Cura Tech

-0.052

0.883941

0.781351

0.235

0.56

-2.47

-2.73902

7.979137

Softsol India

0.484

0.14983

0.022449

0.465

0.73

0.27

0.343511

-0.92164

Subex

0.091

0.255971

0.065521

0.125

0.45

-0.38

-0.76428

0.35304

Virgo Global

0.108

0.421948

0.17804

0.2

0.54

-0.92

-1.85519

3.841386

Hit Kit Global

-0.027

0.542055

0.293823

0.13

0.36

-1.5

-2.66284

7.680527

Kanika Infra

-0.044

0.1393

0.019404

0.01

0.02

-0.43

-2.87741

8.582413

Virinchi

0.276

0.079889

0.006382

0.28

0.39

0.17

-0.26098

-1.32994

Firstobj.Tech

0.106

0.070427

0.00496

0.12

0.2

-0.03

-0.63524

-0.12824

California Soft.

-0.076

0.836384

0.699538

0.045

1.55

-1.78

-0.19309

2.600499

Usha Mart. Edu.

-0.024

0.621453

0.386204

0.165

0.5

-1.69

-2.53878

7.100082

NIIT

0.147

0.102854

0.010579

0.18

0.23

-0.13

-2.5723

7.293278

Birla Shloka

0.127

0.139288

0.019401

0.06

0.42

0.01

1.354524

0.697084

JetkingInfotrai

0.266

0.115969

0.013449

0.245

0.44

0.13

0.431462

-1.46815

Compucom Soft

0.485

0.073673

0.005428

0.49

0.59

0.34

-0.5387

0.52823

Aptech

0.236

0.150643

0.022693

0.23

0.57

-0.01

0.840726

2.62252

 

Table 7shows return on equity characteristics of IT Consulting Software and Networking companies for the study period 2007 to 2017 it was found that return on equity mean varies between -2.1559 to 0.321; standard deviation varies between 0.00483 to 6.783116; variance varies between 0.000 to 46.01066; median varies between -0.14 to 0.34; skewness varies between -3.16167 to 2.819977; kurtosis varies between -1.61175 to 9.99719.

 

Table 7: Return onequity statistical characteristics of IT software products and training services companies’from 2007 to 2016

Company Name

Mean

Standard

Deviation

Variance

Median

Max

Min

Skewness

Kurtosis

Tata Elxsi

0.321

0.136825

0.018721

0.34

0.56

0.11

0.055605

-0.42097

TechnvisionVen

0.0113

0.012588

0.000158

0.015

0.03

-0.01

-0.26256

-0.99438

Genesys Intl

0.183

0.162142

0.02629

0.115

0.44

0.02

0.502525

-1.61114

NetlinkSolns

0.07

0.096954

0.0094

0.02

0.25

-0.01

1.111887

-0.38626

Pan India Corpor

-0.1796

0.297142

0.088294

-0.01

0.001

-0.81

-1.41104

0.726795

Cranes Software

-0.583

2.546972

6.487068

0.19

1.49

-7.67

-2.89037

8.853956

Avance Tech

-0.0013

0.008097

6.56E-05

0.001

0.01

-0.02

-1.4832

2.997434

CressandaSolns

-2.1559

6.783116

46.01066

-0.01

0.09

-21.46

-3.16167

9.99719

Mindteck

0.043

0.03164

0.001001

0.035

0.1

0.01

0.629824

-0.72889

R S Software

0.259

0.121422

0.014743

0.3

0.44

0.04

-0.91743

0.655854

Elnet Technology

0.148

0.031552

0.000996

0.14

0.21

0.12

1.104667

0.083246

Trigyn Techno

0.1451

0.194868

0.037973

0.06

0.62

0.001

2.007921

3.788562

Kellton Tech

-0.06

0.332933

0.110844

0.055

0.13

-0.97

-2.74272

7.924375

Mastek

0.15

0.131487

0.017289

0.105

0.36

-0.01

0.609255

-1.00323

Svam Software

0.0111

0.007218

5.21E-05

0.01

0.03

0.001

2.108975

6.758043

Datasoft Application

0.043

0.018886

0.000357

0.05

0.06

0.01

-1.15798

0.172567

BITS

-0.052

0.146576

0.021484

0.005

0.01

-0.46

-2.93258

8.805546

Dion Global

-0.368

0.466328

0.217462

-0.14

-0.01

-1.21

-1.26849

0.187911

Odyssey Tech

-0.247

1.529743

2.340112

0.205

0.86

-4.43

-2.74887

7.956017

Mangalya Soft

0.013

0.00483

2.33E-05

0.01

0.02

0.01

1.035098

-1.22449

CLIO Infotech

0.012

0.04614

0.002129

0.01

0.12

-0.06

1.223021

3.597907

Ram Info

-1.8

3.856397

14.8718

0.025

0.16

-10.1

-1.84359

1.891382

Nihar Info Glob

-0.358

0.699314

0.48904

-0.035

0.07

-1.94

-1.85083

2.34609

Virtualsoft Sys

0.056

0.304018

0.092427

0.105

0.44

-0.74

-2.18759

6.4915

ABM Knowledge

0.246

0.081677

0.006671

0.235

0.4

0.12

0.377028

0.01346

Nucleus Soft

0.171

0.078238

0.006121

0.145

0.32

0.11

1.534104

0.93113

B2B Soft.Tech

-0.059

0.335409

0.112499

0.035

0.21

-0.96

-2.55059

7.184667

Advent Computer

0.0031

0.009457

8.94E-05

0.01

0.01

-0.01

-0.78536

-1.55679

CG-VAK Software

0.012

0.104541

0.010929

0.015

0.14

-0.19

-0.67471

-0.14205

Ace Soft

0.049

0.056657

0.00321

0.035

0.2

-0.01

2.443523

6.957013

Nimbus Foods

-0.179

0.643436

0.41401

0.02

0.04

-2.01

-3.16065

9.992458

PrithviSoftech

0.103

0.024967

0.000623

0.1

0.14

0.06

-0.05141

-0.57835

Silicon Valley

-0.439

1.091059

1.19041

-0.055

0.01

-3.5

-3.00995

9.216453

PFL Infotech

-0.069

0.388486

0.150921

0.025

0.28

-1.15

-2.87656

8.89344

Panoramic Univ

0.124

0.045265

0.002049

0.11

0.23

0.06

1.389874

3.184695

IEC Education

0.0261

0.026644

0.00071

0.015

0.06

-0.01

0.32277

-1.61175

Twinstar Indus

0.0302

0.054448

0.002965

0.01

0.18

0.001

2.819799

8.226204

Polaris Consulta

0.152

0.045898

0.002107

0.155

0.22

0.07

-0.48814

-0.03899

Cybermate Info

-0.494

1.543317

2.381827

0.01

0.15

-4.87

-3.11977

9.793995

Intense Tech

-0.03

0.176383

0.031111

0.015

0.21

-0.32

-0.42901

-1.02563

Danlaw Tech

-0.0298

0.154676

0.023925

0.001

0.08

-0.46

-2.89114

8.813448

Cura Tech

-0.0269

0.166421

0.027696

0.0105

0.1

-0.48

-2.67298

7.787759

Softsol India

0.0451

0.050948

0.002596

0.025

0.16

0.001

1.53646

1.898136

Subex

-0.027

0.215873

0.046601

-0.055

0.38

-0.39

0.404853

0.726299

Virgo Global

-0.267

0.770484

0.593646

0.02

0.08

-2.44

-3.05885

9.505039

Hit Kit Global

-0.0134

0.133837

0.017912

0.001

0.18

-0.36

-1.98667

6.432099

Kanika Infra

-0.0056

0.013705

0.000188

0.001

0.01

-0.03

-0.63891

-0.8322

Virinchi

0.05

0.036818

0.001356

0.045

0.14

0.02

1.853385

3.858611

Firstobj.Tech

0.0062

0.070093

0.004913

0.0055

0.1

-0.15

-1.1046

2.062426

California Soft.

-0.668

2.131295

4.542418

0.05

1.27

-6.17

-2.30238

5.61521

Usha Mart. Edu.

-0.0138

0.071101

0.005055

0.0055

0.08

-0.18

-1.51632

3.039643

NIIT

0.0562

0.096504

0.009313

0.085

0.2

-0.14

-0.71561

0.70567

Birla Shloka

0.028

0.04638

0.002151

0.04

0.11

-0.04

-0.01637

-0.34043

JetkingInfotrai

0.237

0.230846

0.05329

0.135

0.69

0.02

0.946675

-0.23728

Compucom Soft

0.096

0.029136

0.000849

0.095

0.13

0.05

-0.1779

-1.20845

Aptech

0.078

0.118397

0.014018

0.06

0.38

-0.08

1.941082

5.618293

 

Table 8 shows the r value with respect to correlation efficient for the ROE and the each factors of the DuPont model. Result shows that profit margin, asset turn over and operating income margin are positive correlation with ROE whereas equity multiplier, interest burden and tax burden are slightly negative correlation with ROE.

 

Table 8: Correlation coefficient between ROE and DuPont factors

Company Name

Profit Margin

Asset Turn over

Equity Multiplier

Tax burden

Interest Burden

Operating Income Margin

Tata Elxsi

0.929735

0.587807

-0.36126

0.12601

0.8615

0.900186

TechnvisionVen

0.906908

0.328176

-0.04808

0.176505

-0.55121

0.883617

Genesys Intl

0.894075

0.877224

-0.41317

0.615579

0.945352

0.766273

NetlinkSolns

0.92609

0.939662

-0.14826

0.124786

0.401722

0.926256

Pan India Corpor

-0.17226

0.254134

0.515137

0.211083

0.270549

-0.16679

Cranes Software

0.573663

0.299771

-0.91716

-0.41831

0.025053

0.626485

Avance Tech

0.735133

0.147282

-0.8172

-0.27889

0.174854

0.79556

CressandaSolns

0.017481

-0.38477

-0.99041

0.042476

0.044401

0.22457

Mindteck

0.797088

0.803142

0.566165

0.293398

0.327276

0.802317

R S Software

0.645783

0.429586

-0.43007

0.12735

0.553716

0.504539

Elnet Technology

-0.06774

0.476731

0.923363

-0.26119

-0.17673

0.269665

Trigyn Techno

0.892452

0.360665

-0.37757

0.419079

0.562532

0.86697

Kellton Tech

0.992191

0.491992

0.434941

-0.07822

-0.40348

0.984919

Mastek

0.980186

0.77322

-0.7779

0.245973

0.769841

0.99306

Svam Software

0.258082

-0.06791

-0.08032

0.055399

0.065449

0.116421

Datasoft Application

0.856622

0.497184

0.183319

0.256459

0.130234

0.856622

BITS

0.944084

-0.1145

0.229805

-0.09632

-0.04673

0.945331

Dion Global

0.811711

0.097993

-0.93682

-0.5746

0.231999

0.688255

Odyssey Tech

0.988408

-0.37501

-0.52164

-0.16227

-0.0836

0.965516

Mangalya Soft

0.504812

-0.21822

-0.21822

-0.32733

0.789678

0.167328

CLIO Infotech

0.119135

0.898311

-0.06207

-0.0265

-0.13996

0.180776

Ram Info

0.75705

0.038291

-0.58953

-0.11512

-0.61371

0.757046

Nihar Info Glob

0.779538

0.478431

-0.43633

0.160843

-0.13713

0.791191

Virtualsoft Sys

-0.5396

0.129167

0.570453

0.146219

0.210079

-0.53397

ABM Knowledge

0.43349

0.540453

-0.54204

0.555084

-0.00679

0.326869

Nucleus Soft

0.92662

0.738765

-0.53985

0.696854

0.324868

0.817177

B2B Soft.Tech

0.99056

-0.13879

-0.17388

-0.23771

-0.07033

0.990612

Advent Computer

0.784703

0.587567

0.284742

0.253557

-0.28876

0.806132

CG-VAK Software

0.989555

0.716702

-0.82193

-0.18364

0.096018

0.9764

Ace Soft

0.941681

0.796361

-0.59746

-0.09441

-0.28618

0.966767

Nimbus Foods

0.999864

0.707305

0.243098

-0.94557

-0.68499

0.999863

PrithviSoftech

0.824222

0.57491

-0.18295

-0.01623

0.665469

0.932337

Silicon Valley

-0.77226

0.652823

-0.98613

-0.17016

0.133998

-0.78836

PFL Infotech

0.981531

0.302369

0.419606

-0.08008

-0.15173

0.980014

Panoramic Univ

0.727712

0.598208

0.411082

0.715402

0.57762

-0.3253

IEC Education

0.914045

0.523924

-0.1501

0.640057

0.814904

0.542426

Twinstar Indus

0.985996

-0.27967

-0.24986

0.216938

0.723386

0.965196

Polaris Consulta

0.754239

0.264738

0.175929

0.086256

0.794225

0.694104

Cybermate Info

0.91648

-0.9253

0.318212

-0.21271

-0.39891

0.916043

Intense Tech

0.943329

0.941056

0.142066

0.051436

-0.40013

0.928071

Danlaw Tech

0.996577

0.515452

-0.37107

-0.04004

-0.07928

0.995541

Cura Tech

0.995789

0.568865

-0.70037

-0.63669

-0.15306

0.996074

Softsol India

0.91412

0.993959

-0.75587

0.359356

0.72629

0.819289

Subex

0.958232

0.418225

-0.06244

-0.13302

-0.00372

0.936369

Virgo Global

0.980085

0.108146

-0.98423

0.052594

-0.41708

0.878611

Hit Kit Global

0.962135

0.333695

0.056707

-0.0672

-0.19366

0.934587

Kanika Infra

0.70487

0.819121

-0.74607

-0.77633

-0.72084

0.55268

Virinchi

0.951916

0.106189

-0.44695

0.507409

0.964092

0.479752

Firstobj.Tech

0.915521

-0.09437

-0.35153

0.048334

-0.4552

0.796744

California Soft.

0.233278

0.119706

-0.96736

-0.1078

0.109743

0.420017

Usha Mart. Edu.

0.727712

0.598208

0.411082

0.715402

0.57762

-0.3253

NIIT

0.918673

0.723154

0.470762

-0.21499

-0.42676

0.889442

Birla Shloka

0.714517

0.388645

0.043992

0.115906

0.885479

-0.67181

JetkingInfotrai

0.932792

0.916457

0.200103

-0.20344

0.719865

0.9321

Compucom Soft

0.327752

0.689531

0.688709

0.42915

0.022882

0.310579

Aptech

0.921017

0.358225

-0.25975

-0.07559

-0.06935

0.882876

 

Table 9shows the p value with respect to correlation efficient for the ROE and the each factors of the DuPont model. If the p value is less than 0.05 then we reject the null hypothesis and accept the alternate hypothesis. From this analysis we reject null hypothesis and accept alternate hypothesis that there is a significant relationship between ROE and Net profit margin and also accept there is a significant relationship between ROE and Asset turn over.

 

Table 9: Correlation coefficientp value between ROE and DuPont factors

Company Name

Profit Margin

Asset Turn over

Equity Multiplier

Tax burden

Interest Burden

Operating Income Margin

Tata Elxsi

0

0.066935

0.298851

0.72686

0.000725

0.000162

TechnvisionVen

0.000118

0.34896

0.894399

0.623016

0.091226

0.000329

Genesys Intl

0.000214

0.00042

0.228336

0.051619

0

0.007083

NetlinkSolns

0

0

0.680529

0.729434

0.243014

0

Pan India Corpor

0.63155

0.47446

0.119982

0.554962

0.445144

0.642621

Cranes Software

0.075755

0.395012

0

0.221911

0.94489

0.046302

Avance Tech

0.011899

0.68254

0.002476

0.430557

0.626333

0.004015

CressandaSolns

0.961533

0.265657

0

0.906668

0.902453

0.529208

Mindteck

0.003888

0.003413

0.080718

0.405712

0.350376

0.003475

R S Software

0.037812

0.208167

0.207584

0.724046

0.089408

0.129367

Elnet Technology

0.851548

0.156054

0

0.461765

0.622567

0.446701

Trigyn Techno

0.000229

0.29972

0.275614

0.220956

0.083196

0.000604

Kellton Tech

0

0.141039

0.201812

0.828848

0.240722

0

Mastek

0

0.006239

0.005713

0.489328

0.00664

0

Svam Software

0.467336

0.851182

0.824305

0.878422

0.856534

0.747078

DatasoftApplication

0.000847

0.136135

0.609389

0.470259

0.718

0.000847

BITS

0

0.751145

0.519338

0.789882

0.897368

0

Dion Global

0.002816

0.786298

0

0.075148

0.515224

0.022961

Odyssey Tech

0

0.279192

0.114433

0.651804

0.817218

0

Mangalya Soft

0.129121

0.54128

0.54128

0.350296

0.004533

0.641525

CLIO Infotech

0.741342

0.000177

0.863886

0.94172

0.697719

0.614462

Ram Info

0.008327

0.915837

0.065911

0.749837

0.052568

0.008327

Nihar Info Glob

0.005537

0.154337

0.200177

0.654708

0.703596

0.004395

Virtualsoft Sys

0.099948

0.720235

0.077855

0.684738

0.556899

0.104356

ABM Knowledge

0.203523

0.09929

0.098075

0.088425

0.985065

0.351017

Nucleus Soft

0

0.011243

0.099754

0.020544

0.354181

0.002478

B2B Soft.Tech

0

0.700145

0.628283

0.504568

0.845925

0

Advent Computer

0.005007

0.067079

0.420458

0.475505

0.413584

0.003195

CG-VAK Software

0

0.01565

0.002209

0.608746

0.790526

0

Ace Soft

0

0.003948

0.061317

0.793978

0.417986

0

Nimbus Foods

0

0.017851

0.494612

9.29E-06

0.023927

0

PrithviSoftech

0.002087

0.07495

0.610117

0.96429

0.030301

0

Silicon Valley

0.006352

0.034996

0

0.63579

0.710129

0.004655

PFL Infotech

0

0.390688

0.220305

0.824824

0.673366

0

Panoramic Univ

0.013323

0.060894

0.230976

0.015943

0.073217

0.353492

IEC Education

0

0.112525

0.676718

0.040211

0.002615

0.097779

Twinstar Indus

0

0.429202

0.482226

0.543724

0.014206

0

Polaris Consulta

0.008735

0.455429

0.624173

0.8115

0.004129

0.021296

Cybermate Info

0

4.19E-05

0.364802

0.551833

0.246696

0

Intense Tech

0

1.36E-05

0.693336

0.887071

0.245099

0

Danlaw Tech

0

0.11971

0.284752

0.912012

0.826546

0

Cura Tech

0

0.078908

0.019608

0.041669

0.670637

0

Softsol India

0

1.89E-10

0.008497

0.301631

0.013609

0.002356

Subex

0

0.222015

0.863069

0.712169

0.991805

0

Virgo Global

0

0.764634

2.21E-08

0.884542

0.223442

0.000399

Hit Kit Global

0

0.340331

0.875568

0.852724

0.588904

0

Kanika Infra

0.018455

0.002365

0.010004

0.005886

0.014745

0.090155

Virinchi

0

0.768799

0.18797

0.126784

1.25E-06

0.153011

Firstobj.Tech

0

0.794054

0.313179

0.89385

0.178779

0.003916

California Soft.

0.512831

0.740137

7.84E-07

0.765375

0.761237

0.219798

Usha Mart. Edu.

0.013323

0.060894

0.230976

0.015943

0.073217

0.353492

NIIT

0

0.014254

0.162174

0.547448

0.211562

0.00026

Birla Shloka

0.016144

0.260391

0.90335

0.748169

0.000306

0.028118

JetkingInfotrai

0

7.09E-05

0.576269

0.569758

0.014954

0

Compucom Soft

0.349626

0.02259

0.022829

0.208689

0.94966

0.377168

Aptech

0.316028

0.9503

0.949777

0.559583

0

0.276171

 

4. SUMMARY AND CONCLUSION:

This paper has attempted to analyze the characteristics of Indian IT Software product and training services companies and also to ascertain the patterns of the ROE for Indian IT Software product and training services companies using the DuPont model. The overall conclusions of this study are summarized as follows:

 

The analysis of return on equity shows that there is a significant difference in the performance of IT companies over different time periods. Increase in the profit margin and asset turn over it reflects positively on the return on equity. Hence we reject null hypothesis and accept alternate hypothesis that there is a significant relationship between ROE, Profit margin, asset turn over.

 

5. IMPLICATIONS OF THE STUDY:

The results of the study can be compared with other foreign IT companies and also with startup IT companies to understand how Indian Information Technology companies are operating and also to know how well it can generate revenue. The results of the study can also be used by policy makers and regulators of the IT companies to create conducive investment environment by understanding factors affecting return on equity.

 

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Received on 21.09.2020            Modified on 19.10.2020

Accepted on 23.11.2020           ©AandV Publications All right reserved

Asian Journal of Management. 2021; 12(2):169-180.

DOI: 10.52711/2321-5763.2021.00026