Business Strategies: An Approach to Earnings Analysis

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Anshika Agarwal
Purushottam Kumar Arya


This study attempts to analyse Indian firms sustainability of earnings. Investors, security analysts, and managers focus on firms earnings. Therefore, concerns about Earnings quality arise. Low-quality earnings are more likely to decay in future and vice-versa (Penman and Zhang 2004). Firms were classified into two strategy groups: revenue growth group and non-revenue growth group (which is also the cost-reduction strategy group). Further, these groups are divided into an operating earnings measures group and a non-operating earnings measures group. To analyse the sustainability of earnings of Indian Firms, Panel data regression methodology has been applied. Panel data captures both cross-sectional and time-series dimensions. Also, various assumptions have been tested, and robust regression analysis has been applied to deal with heteroscedasticity and autocorrelation. The study is done for a period from 2001 to 2021. The study included 223 firms as a sample size. This study finds that in the Indian scenario, operating earnings and non-operating earnings do impact the sustainability of earnings. Most studies pertain to the developed nations. Indian firms were analysed for the sustainability of Earnings by modifying and calculating various variables from the firms financial statements. Security Analysts, Assets Management Companies, and consultants could use this study to pick various stocks for their clients. Also, managers could use it to frame policies for the prospective future of the firm.


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Agarwal, A., & Arya, P. K. (2023). Business Strategies: An Approach to Earnings Analysis. Ramanujan International Journal of Business and Research, 8(2), 83–93.