Review of Professional Management
issue front

Nufazil Altaf1 , Farooq Ahmad Shah2

First Published 31 Dec 2015. https://doi.org/10.1177/rpm.2015.13.2.94
Article Information Volume 13 Issue 2 July-December-2015

1Research Scholar, School of Business Studies, Central University of Kashmir , 2Associate Professor, School of Business Studies, Central University of Kashmir

Abstract

The paper attempts to study a bi-directional relationship between profitability and firm value of CNX 100 companies for the period of 5 years (2009-2010 to 2013-2014). After following the systematic deletion method of sampling, the study selected 61 sample companies for final analysis. This study has used secondary sources of data collected mostly from Annual statements of companies. Market value (MV) and Enterprise Value (EV) respectively have been used to measure the Firm Value while Return on Assets (ROA) and Return on Equity (ROE) ratios are used to measure profitability. Various econometric techniques have been used for data analysis. Results of the study indicated Co-integration and bi-directional relationship among the three variables that are ROA, ROE and EV. Further, results reveal the existence of significant positive relationships between ROA and ROE on one side and EV on the other


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