This study aims to assess the financial stability of the top ten firms in the Indian automobile sector by analyzing their annual turnover rates over the research period from 2013 to 2023. The primary objective is to examine business risk and firm-specific risk resulting from shifts caused by a rapidly changing business environment. The study also seeks to identify the types of businesses that pose the greatest threat to the overall business environment. To achieve these goals, the return on capital employed (ROCE) was used to assess the level of business risk. In contrast, the capital productivity ratio (CPR), cost structure ratio (CSR), and liquidity ratio (LR) were used to assess company-specific risk. The Gini Coefficient of Concentration was employed to determine the susceptibility of companies to the dynamic nature of the commercial environment. The Altman's Z-score and the Ohlson O-score were calculated to assess the financial health and risk profiles of the selected firms. The Sustainable Growth Rate (SGR) was calculated to help corporations avoid financial difficulties and prevent over-leveraging. Additionally, a Pearson correlation coefficient and a t-test were conducted to determine the degree of correlation between Business Risk and Company-Specific Risk. Hence, resulting that the different categories of risk do not significantly differ among the majority of the organizations we examined here. On the other hand, one can see the complete reverse when it comes to the risk of liquidity.
Mittal et al. (Wed,) studied this question.
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