Impact of firms specific on the financial performance of Indian firms

: The main aim of this article is to examine the effect of firms’ specific on the financial performance of Indian firms. The study is based on 1069 firms listed on the Bombay stock exchange for the period from 2011 to 2017. Descriptive statistics, correlation matrix, and regression models are used for analyzing the data. The study found that cost of financial distress, growth opportunities, firms size, and total taxes positively and significantly impact the financial performance of Indian firms measured by return on assets and return on capital employed. On the contrary, asset structure and leverage negatively and significantly impact the financial performance of Indian firms. Most previous studies were based on small samples; this article bridges an existing gap in the literature by covering large data of1069 firms for seven years which make the results of the study to be generalized. The findings of this study have useful implications for policymakers, practitioners, and academicians. asset structure and leverage negatively and significantly impact the financial performance of Indian firms. Most of the previous studies were based on small samples; this article bridges an existing gap in the literature by covering large data of1069 firms for seven years, which make the results of the study to be generalized. The findings of this study have useful implications for policymakers, practitioners and academicians.


Introduction
Most organizations have started their businesses in order to earn profit and provide their shareholders with sufficient income in exchange. Profitability can essentially be described as the measure at which an organization can make the most of its available funds and assets successfully and efficiently, as well as transform them into outstanding profits. )Devi A & Devi S, 2014) Advocate that profitability helps companies to improve their market climate by enhancing negative shocks and investing in improving them. It was possible to determine the importance of corporate profitability at 2 stages, that is, macro and micro of the financial sector. The critical prerequisite of an indomitable enterprise and the cheap resource of capital is micro-level return.
According to Bobakova (2003), the management of an organization must realize a profit for carrying out every business. At the macro stage, cost-effective and profitable market environments are strengthened and continue to improve the business climate. For this reason, studies in the fields of economics, corporate strategy, accounting, marketing and finance have found the assessment of the variables influencing firm profitability and the identification of sources of differentiation in company-level profitability as core research topics (Jonsson, 2007;Nunes, 2009;Gaur & Gupta, 2011).
Organizations in growth economies are typically expected to perceive critical obligation and their success is one of the most relevant concerns for many business stakeholders such as stakeholders, creditors, workers, vendors and governments (Bhayani, 2010;Madrid, Auken & Perez, 2007) For a corporation to stay in operation and to survive competition from businesses competing in related markets, optimizing profit is a very important goal. It is a significant prerequisite for a company's long-term sustainability and growth, while it is a primary precondition for achieving a corporate entity's other financial objectives (Gitman & Zutter, 2012).
Profitability is a primary indicator of a company's success and constitutes an important component of its financial statements. It indicates the capacity and ability of the company to produce profits at a revenue rate, asset level, and capital stock in a particular time period (Margaretha & Supartika, 2016). As a result, the viability of businesses and ways of developing them have created significant literature disputes and become topical in the fields such as finance, economics, accounting, and management. Profitable companies raise the value, recruit workers, strive to be more creative, more economically conscious, and support the country as a whole by paying taxes. Strong business production rates contribute successfully to the generation of profits and the economic growth of an economy (Olutunla &Obamuyi, 2008;Lazar, 2016). The main aim of the present study is to examine the effect of firms' specific on the financial performance of Indian firms. Accordingly, the present study is organized as follows: section 2 provides literature review. Section 3 presents Research methodology. Section 4 Analysis and discussion, and Section 5 provides Conclusion The determinants of profitability for Indian life insurance firms have been investigated by Charumathi (2012).

Literature review
The findings offered proof of a positive and essential link between size, liquidity, and profitability. However, it has been found that debt, premium growth, and equity capital have a negative and serious impact on profitability.
Mistry (2012) studied the Indian automotive industry over a period of five years. The results show a favorable and critical relationship between size, debt to equity ratio and inventory turnover ratio in most years. The company's liquidity was found to have a significant and negative correlation with profitability.
Al-Jafari and Alchami (2014) analyzed the profitability determinants of Syrian banks using the Generalized Moment Method (GMM) methodology. Their findings show that the profitability of Syrian banks is greatly influenced by the liquidity ratio, bank size, credit risk, and management performance. Likewise, for 55 Sri Lankan manufacturing firms using static panel templates, Pratheepan (2014) evaluated the profitability determinants. The findings suggest that size has a major positive profitability association. Therefore, tangibility has been shown to have an opposite statistical correlation with profitability. But at the other hand, debt and liquidity have been shown to have an insignificant impact on profitability. The viability of Bangladesh's pharmaceutical firms was investigated by Bashar and Islam (2014). They suggested that it had a positive and valuable impact on profitability to handle inventory effectively.

Research methodology
The target population of the study is all non-financial firms listed on Bombay stock exchange, there are almost 4056 non-financial firms listed on Bombay stock exchange. The study eliminated firms that do not have data for the study period from 2011 to 2017 and studies that have mission values, there for the final sample of the study is 1069 firms which do not have even one single missing value. Data has been collected using various sources like books, journals, and annual reports extract financial details from the ProwessQ database (the largest database focusing exclusively on Indian companies' financial performance).
There are two variables; the independent variable is firms' specific which includes cost of financial distress, growth opportunities, firms size, total taxes, asset structure, and leverage, while the dependent variable is firm's performance, which was measured by return on assets, return on capital employed and return on net worth. The researcher uses a panel regression approach to analyze the impact of firms specific (independent variable) on firms' financial performance (dependent variable) of Indian firms listed on BSE. The estimated model is based on 1069 companies with 7483 years observation for the period from 2011 to 2017. The following are the regression models which have been used.

Descriptive statistics
The central tendency is seen in Table (2) for all variables included in the study, which are illustrated as follow: the mean values of firms' profitability are 3.212, 4.508 and 5.305 for ROA, ROCE, and RONW, respectively,      Model 1 in a table (5) represents the impact of firms' specific on the financial performance of Indian firms. Results of fixed effect model show that the R 2 and adjusted R 2 are fairly good, R 2 is 0.365 which means that 0.365 of the variation in return on assets of Indian firms is attributable jointly by AS, COFD, GO, SIZE, TTAX, and LEV, while the rest of variation in return on capital employed of Indian firms can be explained by other variables which are not included in this study. It is clear from table 5 that COFD, GO, and TTAX has a positive and significant impact on return on capital employed of Indian firms. On the contrary, AS, size, and LEV have a negative and significant impact on return on capital employed.

c. Impact of firms specific on return on net worth
Model 1 in table (5) represents the impact of firms' specific on the financial performance of Indian firms.
Results of fixed effect model show that the R 2 and adjusted R 2 are fairly good; R2 is 0.56 which means that 0.56 of the variation in return on net worth of Indian firms is attributable jointly by AS, COFD, GO, SIZE, TTAX and LEV, while the rest of variation in return on net worth of Indian firms can be explained by another variables which are not included in this study. It is clear from table AS, size, leverage negatively and significantly impact return on net worth and the rest of the variables has an insignificant impact on return on net worth.

Conclusion
The main aim of this article is to examine the effect of forms' specific on the financial performance of Indian firms. The target population of the study is all non-financial firms listed on Bombay stock exchange; there are almost 4056 non-financial firms listed on Bombay stock exchange. The study eliminated firms that do not have data for the study period from 2011 to 2017 and studies that have mission values, there for the final sample of the study is 1069 firms which do not have even one single missing value. Financial data are extracted from ProwessQ database. The study found that cost of financial distress, growth opportunities, firms size, and total taxes positively and significantly impact the financial performance of Indian firms measured by return on assets and return on capital employed. On the contrary, asset structure and leverage negatively and significantly impact the financial performance of Indian firms. Most of the previous studies were based on small samples; this article bridges an existing gap in the literature by covering large data of1069 firms for seven years, which make the results of the study to be generalized. The findings of this study have useful implications for policymakers, practitioners and academicians.