Financial Performance of Food Processing Industry: A Study in Assam, India

The food processing industry is one of the major agro-based industries. It processes raw food crops with the objective of profit motive. In Assam, varieties of horticulture crops are produced in its different parts. The state’s food processing units process only a part of them. The present study aims to analyse the financial performance of the food processing industry of the state. Primary data for the study are collected from a sample of 63 food processing units in the state. Liquidity, solvency, activity and profitability ratio are applied to examine the financial performance of the industry. The study finds that the liquidity performance of the food processing units is lower than the benchmark level. The solvency position of the units is also found lower than the benchmark level. The grains and cereals units are observed as the most efficient asset-utilising units. It is observed that the grains and cereals units earn the highest returns from investment. The food processing units should minimise their liabilities and reduce their dependence on external sources of finance. Grains and cereals units should be encouraged because of their maximum returns earning capacity from the investment.