Volume : III, Issue : VII, July - 2013

Analyis of Liquidity, Profitability, and Financial Distress : A Case Study of Kesoram Cements

V. Narenhra

Abstract :

Liquidity involves planning and controlling of current assets and current liabilities in such a manner that eliminates the risk of the inability to meet due short–term obligations, on one hand, and avoids excessive investment in these assets, on the other hand . Liquidity management has been taken as an important tool to analyze the sustainability and liquidity position of any enterprise that may also help any organization to derive maximum profits at minimum cost Profitability, in this reference may be the return earned on the total assets of the company. A firm is required to maintain a balance between liquidity and profitability while conducting its day–to–day operations. Investments in current assets are inevitable to ensure delivery of goods or services to the ultimate customers. The long–term survival depends on satisfactory income earned by it. This paper attempts to study the association between liquidity, profitability and efficiency from the year 2005–2012. The Altman’s Z–score model has been employed by the researcher to predict the risk of financial distress during the period 2005–2012. The results indicated that the liquidity, and solvency position of the company has been satisfactory. The Z–score analysis revealed that the company is not suffering from financial distress and there are indications of turnaround activities already undertaken by the company

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Article: Download PDF   DOI : 10.36106/ijar  

Cite This Article:

V. Narenhra Analyis of Liquidity, Profitability, and Financial Distress : A Case Study of Kesoram Cements Indian Journal of Applied Research, Vol.III, Issue.VII July 2013

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