A Study On Cost Volume Profit Analysis And Its Impact On Profitability

Abstract

This Study Analyses The Impact Of Cost-Volume-Profit (CVP) Analysis On The Profitability Of Tenneco Automotive India Pvt. Ltd Over The Period 2020—2024. CVP Analysis Was Employed To Evaluate The Relationship Between Costs, Sales Volume, And Profit Through Break-even Analysis, Contribution Margin, And Profit-volume Ratio. The Research Is Based On Secondary Data Collected From Annual Financial Statements, Covering Key Variables Such As Equity, Liabilities, Fixed Assets, Net Profit, And Return On Investment. The Findings Reveal Notable Fluctuations In Total Equity And Liabilities Across The Study Period, With Current Liabilities And Borrowings Exerting Significant Influence On Profitability. Net Profit Demonstrated An Overall Rising Trend, With Regression Analysis Showing A Strong Positive Correlation (R 0.902) Between Sales Volume, Asset Utilization, And Profitability. Approximately 81% Of The Variation In Net Profit Was Explained By Changes In Cost And Equity Factors, Reflecting The Importance Of Effective Cost Management. The Study Highlights That CVP Analysis Is A Vital Decision-making Tool For Managers In Controlling Costs, Formulating Pricing Strategies, And Optimizing The Sales Mix. It Not Only Supports Short-term Financial Planning But Also Contributes To Long-term Sustainability By Ensuring Efficient Utilization Of Resources In The Competitive Automotive Sector.

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