LIQUIDITY AND PROFITABILITY MANAGEMENT: A COMPREHENSIVE CASE OFINDIAN AUTOMOBILE INDUSTRY
European Journal of Molecular & Clinical Medicine,
2020, Volume 7, Issue 8, Pages 5836-5841
AbstractIn today’s competitive business world, enduring for a long period is the biggest challenge for every company and future is turned so uncertain. Firms have been able to make profits despite being affected by the pandemic as they possessa strong and healthy financial framework. The management of profitability and liquidity are crucial for determining the economic health of the firms. Moreover, the management teams of the companies also believe that management of liquidity and profitability are the significantcorporate finance functionsthat assist in crucial decision making. Hypothetically, profitability position of the company could be affected by liquidity management. Therefore this study has been intended to study the relationship between profitability and liquidity in Automobile Industry for ten years from2010 to 2019. The studyhas been made by the use of statistical tools such ascorrelation,coefficient and regression analysis. Moreover, the outcome of the study reveals that there is insignificant effect of management of liquidity on profitability. Further, the result also showed that there is negative association between profitability and the explanatory variables (CR, LRS and WCTR).
Keywords: Liquidity Management, Profitability, Correlation Coefficient and Regression
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