The role of supply chain finance in enhancing financial performance: Evidence from personal and home care product industry

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By leveraging supply chain finance (SCF), businesses can optimize their cash flow and strengthen their supply chain relationships, improving overall performance. By effectively harnessing this strategy, companies can dramatically enhance cash flow, strengthen supplier relationships, and propel overall efficiency and growth across their supply chains. The study considered 34 years, from 1990-91 to 2023-24, for India's personal and home care product industry companies, which is a part of the consumer goods industry and contributes as the fourth largest sector in the country's GDP. The study emphasizes the development of an empirical model on the impact of SCF on financial performance parameters like net profit margin (NPM), return on equity (ROE), return on capital employed (ROCE), and return on assets (ROA). The study applied an ordinary least square regression method to establish the relationship. Four empirical models were developed where Model 1 and Model 2 indicate that the accounts receivable turnover ratio (ART) emerged as a key SCF parameter with a statistically significant correlation to firm performance, particularly influencing NPM and ROE. The results of Models 3 and 4 reflect that ATR does not significantly impact the ROCE and ROA of firms. The study results also show that the SIZE variable positively influences financial performance, while LEV (Leverage) has a negative influence. This study compellingly illustrates the connection between SCF and a firm’s economic success, providing actionable insights for stakeholders eager to sharpen their strategic approaches. By prioritizing SCF, industries can unlock significant competitive advantages and drive sustainable growth.

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    • Table 1. Types of companies in the Personal and Home care product industry of India
    • Table 2. Measurement of variables
    • Table 3. Descriptive summary
    • Table 4. Correlation analysis and VIFs
    • Table 5. Regression analysis results
    • Conceptualization
      Pinku Paul
    • Data curation
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    • Formal Analysis
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    • Funding acquisition
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    • Investigation
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    • Methodology
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    • Project administration
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    • Resources
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    • Software
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    • Supervision
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    • Validation
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    • Visualization
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    • Writing – original draft
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    • Writing – review & editing
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Investment Management and Financial Innovations
Investment Management and Financial Innovations