Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)


Operational velocity, utilization of resources and profitability: A mutual study of leading Indian automobile corporations

Author(s): Anis Ali

Profitability of the business organization refers to the financial performance and indicates the profit earning capacity of the business organization. The profitability of the business organization is either enhanced by the lowering of the direct costs of the products or the accelerating the frequency of the production to minimize the indirect costs or time costs. The direct cost of the products can be minimized up to a certain limit after that operational velocity governs the time cost of the product. The velocity of the utilization of the resources enhances the level of production and absolute profit of the business entity, ultimately. The Indian automobile sector is the most prominent and contributing sector in the Indian economy. There are significant differences in the operational velocity, utilization of resources velocity, and profitability of the leading Indian automobile corporations. The Indian automobile corporations of smaller size have better earning capacity than the bigger Indian automobile corporations. Operational velocity governs profitability strongly than the velocity of the resources’ utilization. The Indian automobile corporations need to focus on operational velocity and utilization of resources to improve profitability and enhance absolute profit.

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