Impact of different financial ratio on roe of listed companies in BSE 100

The work has been focused on how different financial efficiency measuring ratios are related with ROE of BSE100 companies. The study is mainly based on BSE 100 companies except some financial institutions and debt less firms. The reference period of the this study is fifteen years and the data is completely based on secondary data sources which has been collected from's equity data base’. This study used pooling regression model to test the explanatory power (influences) of different financial efficiency measuring ratios on companies’ ROE. Method of Ordinary Least Square (OLS) is used to estimate the regression line. OLS is used because it minimizes the error between the estimated points on the line and the actual observed points of the estimated regression line by giving the best fit. All the dependent and independent variables are pooled cross section time series for estimation. Adjusted R2 is carried on to test level of significant of regression line. The findings of the study have put forth that ROCE or ROA has significant estimation power to estimate ROE of a company where as other financial ratios have low explanatory power to the variability of ROE of a company.