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An attempt has been made in this study to find the relationship that exists between growth and profitability, liberalization policy of the government and its effect on profitability of corporations. Answers to certain fundamental questions have been incorporated in the study.

It is believed that a company because of its high growth rate in assets yields higher profitability than the companies with lower growth rate of assets. The problem of growth effect on profitability of corporate sector lie on the heart of our enquiry. Our interest centers on the question whether there exists any relationship between growth and profitability. Further, do liberalization policy of the government has any impact on the profitability of varying growth groups of manufacturing concerns as revealed from the cross section analysis of back and forth of 5 years of declaration of liberalization policy of the Government of India in 1991. Thus, the focus of the study is to show the relationship between growth and profitability and liberalization and profitability. In other words the study is to exhibit the relationship between growth and profitability in the context of liberalization policy of the government. The present study focuses on comparative corporate performance of different growth categories of firms with regard to profitability between pre and post liberalization period. It, therefore, seeks to study the liberalization effect on profitability of manufacturing firms, along with growth effect.

To illustrate the inter-dependence between growth-profitability and liberalization policy-profitability, this survey is divided into six chapters. Chapter one deals with introduction on the subject. The second chapter discusses the theoretical framework of the study, while the third chapter covers the methodology and research design of the work. Chapter fourth is meant for the cross-section analysis of growth-profitability relationship during pre and post-liberalization period with the help of ratio analysis and other statistical tools. An attempt has been made in chapter five to study and analyze the extent of relationship that do exist between the different determinants of the financial ratios examined in the study with the help of correlation analysis. Summary of the findings, test of hypothesis, concluding remarks find their respective places in the last and concluding chapter i.e. in the chapter six. Suggestions have also been offered at the end of the study for the maximization of profitability by varying growth group of firms and to derive the optimum benefit of the liberalization policy of the Government of India.

It is, therefore, in the fitness of things that efforts are made in this piece of work to find out growth effect on the profitability of corporate sector, that too, for the period from 1986-87 to 1995-96, when liberalization policy measures being advocated and followed by the Government of India. We hope this study would be both light-giving and fruit-bearing to researchers of this line.