Working Capital and Liquidity Performance of Cement Companies - An Empirical Analysis
Journal Title: International Journal of Business and Management Invention - Year 2018, Vol 7, Issue 8
Abstract
In the post liberalization era working capital management has grabbed more attention in determining the financial health of a firm. Liquidity of the firm sometimes proves more important than the longterm solvency of the firm because day to day operations depend on variety of sources of funds which determines the credit worthiness of the firms. There are firms which liquidated due to inefficient working capital management. Hence a study about working capital is critical in the present scenario. This particular study tries to assess the nature of relationship of Working Capital Management (WCM) and liquidity with the selected firm’s performance in cement industry. It is necessary for every firm to maintain an optimum level of working capital which makes a perfect trade-off between profitability and liquidity of the firm. Current ratio, Quick ratio, Current assets to Total assets ratio, Current Assets turnover ratio, working turnover ratio etc. are some of the parameters to measure the firm soundness towards working capital. A sample of 5 cement companies listed on Bombay stock exchange for a period of 2008 to 2017 has been selected for the study. Final outcomes of the analysis suggest that efficient management of working capital and liquidity leads to financial success.
Authors and Affiliations
Mrs O. V. A. M. Sridevi, Prof. G. V. Chalam
Keywords
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