Impact of Operational Efficiency on Overall Profitability- A Case Study of Gujarat Industries Power Company Limited

Abstract

This study applies Karle Pearson's coefficient correlation tool to measure the impact of operational efficiency on overall profitability of Gujarat Industries Power Company Limited, based on published data during 2005-06 to 2010-11. Accounting Ratio i.e. Activity Ratio is a more important source of operational efficiency&overall profitability. Activity ratios include those ratios, which highlight upon to activity and operational efficiency of the business firm. Operational efficiency refers to the profitable, efficient and judicious use of resources (financial) available to an organization in perfect consonance with clearly laid-down financial policies relating to the operation. Using Karle Pearson's coefficient correlation tool, correlation has been calculated&examined that insignificant positive correlation between operational efficiency and overall profitability exists, during research period, 't '-test was applied to accept&reject null hypothesis.