Decoding the Sensitivity of Indian Firms’ Financial Reports to Economic Fluctuations

This study, titled Sensitivity of Firms’ Accounting Information to Macroeconomic Variables: An Empirical Study in the Indian Context, represents the culmination of over a decade of academic inquiry and professional experience. As businesses navigate increasingly complex and interlinked global markets, understanding how external economic forces shape corporate performance is more critical than ever. 

Motivated by both scholarly gaps and practitioner needs, I set out to explore how three vital accounting metrics—sales, operating profit, and profit after tax—respond to fluctuations in exchange rates, interest rates, and inflation. The research uses secondary data from India’s leading listed companies over a ten-year period (2006–07 to 2015–16) and applies robust panel-data econometric techniques to unravel these dynamics. Along the way, I have been fortunate to learn from numerous seminal studies, refine my hypotheses, and test competing models to ensure the rigor and relevance of the findings.

I dedicate this work to all stakeholders—creditors, investors, managers, and policymakers who rely on transparent, timely, and meaningful accounting information to make informed decisions. It is my hope that this analysis deepens academic understanding and equips practitioners with insights to better anticipate and manage economic shocks. My heartfelt thanks go to Dr. Pushpa D. Bhatt for her unwavering guidance, to the faculty and peers at Bangalore University for their invaluable feedback, and to my family for their enduring support throughout this journey.