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“LIQUIDITY MANAGEMENT OF SELECTED TRANSPORTATION
COMPANIES IN INDIA”
S.PUSHPAVATHI 1 D.DINESH KUMAR
2
1Assistant Professor of NGM College, Pollachi
2PG Department of International Business, NGM College, Pollachi
ABSTRACT
Liquidity management involves planning and controlling current assets and current liabilities in such a
manner that eliminates the risk of the inability to meet the short term obligations, on one hand, and
avoids excessive investment in these assets, on the other.The study covers a period of 10 years viz,
2005-2006 to 2014-2015. For the purpose of investigation purely secondary data is used. The
techniques of mean, standard deviation and Rank testhas been applied to analyse the data. In our case,
Ultimate Rank Test shows that the liquidity position of trading companies.
INTRODUCTION
Whatever be the size of a business, liquidity may be considered as one of itscontrolling nerve
centre. Thus, liquidity management is a very important facet of financial management. Both excessive
liquidity as well as inadequate liquidity hurt the normal activity of the business firm. Excessive
liquidity implies idle funds which fail to earn any profit for the firm. Paucity of liquidity not only
impairs the firm‟s profitability but also results in business operation interruptions and inefficiencies.
An overall control over liquidity of the firm can ensure a smooth running of its business wheel
MEANING OF LIQUIDITY MANAGEMENT
Liquidity management implies managing the firm‟s ability to meet its short term obligations.
It can be defined as an act of planning, organizing, directing and controlling the liquidity of a firm to
reach a pre-determined end. Liquidity management is necessary to strike a balance between return and
the risk of being illiquid at a given point of time. Generally, liquidity management can also be viewed
as the management of the inflows and the outflows of cash. However, in wider sense, it is the
management of current assets and current liabilities. Liquidity management is associated with both the
quantitative and qualitative aspects of liquidity. The quantitative aspect includes the quantum,
structure and utilization of liquid assets while the qualitative aspect implies the ability of a firm to
meet all present and potential demands in cash in such a way that will minimize cost and maximizes
the value of business (Sur et al, 2001).
Liquidity management involves planning and controlling current assets and current liabilities
in such a manner that eliminates the risk of the inability to meet the short term obligations, on one
hand, and avoids excessive investment in these assets, on the other. In fact, excessive liquidity means
accumulation of idle funds which may lead to lower profitability, increased speculation and
unjustified expansion, extension of liberal credit terms, liberal dividend policies etc. On the other
hand, inadequate liquidity results in interruption of business operations. A proper balance between
these two extreme situations should therefore be maintained for efficient liquidity management.
STATEMENT OF THE PROBLEM
This study is mainly analytical and examining in nature. The measurementof a firm‟s short-
run ability to pay its debts as they come due is veryimportant aspect of financial analysis. This study
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focuses on theexamination of the liquidity management of the selected companies inIndian corporate
sector. More specifically, the present study makes anassessment of the efficiency of the management
of liquidity and indentifiesthe problems associated with it. Moreover, recently airways met problems
financially. The findings of the studyprovide some guiding principle for minimizing such problems
associatedwith the liquidity management. The present study covers a period of tenyears from 2006 -
2015 for analyzing the issues associated with theliquidity management of the selected.
SCOPE OF THE STUDY
The scope of the present research study is identified after and during the study is conducted.
The study of financial performance of logistics and transport companies is based on tools like
different profitability ratios, average of the ratios and inSpatial Dimension Indicators. Further the
study is based on 10 years Annual Reports of the major logistics and transport companies such as Jet
airways, Spice jet, Container corporation, Transport corporation andAegis logistics. It excludes the
study if other financial problems like working capital, capital expenditure, fund flows and cash flows
etc.
OBJECTIVE OF THE STUDY
The following are the major objectives of liquidity management:
To measure the liquidity of companies by using some important ratios.
To assess the liquidity of the selected companies more rigorously by using comprehensive
rank test.
To make some suggestions and specific recommendation for improvement of the liquidity
management.
RESEARCH METHODOLOGY
The study is based on secondary data for the top five companies in transports Industry.
Data‟s are collected from the secondary source such as capital line corporate database, money control,
CMIE reports and internet sites. The study covered ten year period from 2006 to 2015.the selected
five companies are Jet airways, Spice jet, Container corporation, Transport corporation and Aegis
logistics.
TOOLS AND TECHNIQUES OF THE STUDY
Tools used for this study are:
Ratio Analysis
Mean
Standard Deviation
LIMITATIONS OF THE STUDY
The present study is only for a period of 10 years. The result of the study cannot be
generalized.
Data were collected from financial statements. The inherited limitations of financial
statements cannot be avoided.
Ratio analysis cherishes the limitation of financial accounting statements.
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PERIOD OF THE STUDY
The period of the study covers the period from the year 2015 to 2016.
REVIEW OF LITERATURE
MedhatTarawneh (2006) - “A Comparison of Financial Performance in the Banking Sector” the
purpose of this study is to classify the commercial banks in Oman on the basis of their financial
characteristics revealed by the financial ratios.A total of five Omani commercial banks with more than
260 branches were financially analyzed for the period of 1999 to 2003. Total deposits, total credits,
total assets, total shareholders equity are ranked and Simple regression was used to estimate the
impact of asset management, operational efficiency, and bank size of these banks. The results of this
study imply that it might be necessary for a bank management to take all the required decisions to
enhance the financial positions of the bank.
Sanjay J. Bhayani (2006) - “Performance of the New Indian private sector banks: a comparative
study” analyzed the performance of the new private sector banks with the help of the CAMEL model.
The study covered 4 leading private sector banks-ICICI, HDFC,UTI and IDBI for a period of five
years from 2000-2004. It is revealed that the aggregate performance of IDBI Bank is the best among
all the banks, followed by UTI.
Nadim Jahangir and Shubhankar Shill (2007)- “An empirical investigation on commercial banks
profitability in Bangladesh” to investigate banks market concentration, banks market size, banks risk
with banks return on equity in Bangladeshi banks during 2000-2005. Data analysis was done using
correlation matrix and stepwise regression. It was found that market concentration and banks risk
contribute very little to explain banks return on equity.
Mrs. SangeetaArora and Ms. ShubpreetKaur (2009)- “Internal determinants for diversification
banks in India an Empirical analysis” in this paper an attempt has been made to empirically analyze
the significance of internal determinants for diversification of banks in India across the time period
2000-2007. Consisting of foreign sector bank, private sector banks, nationalized banks and SBI group.
The internal determinants have been analyzed by the multiple regression and various ratios. It
concludes the variances in foreign banks are higher followed by national banks and private banks
respectively and least in the case of SBI group.
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ANALYSIS AND INTERPRETATION
TABLE:.1
CURRENT RATIO OF THE SELECTED COMPANIES FOR THE PERIOD 2006 TO 2015
INTERPRETATION
It expresses the relation of the amount of current assets to the amount of current liabilities. It
is a traditional measure used in ascertaining the ability of a firm to meet its short-term obligations.
The higher the CR, the larger is the amount available per rupee to meet short-term obligations and the
greater is the security available to the creditors. Traditionally a current ratio of 2:1 is considered
satisfactory for a firm and it is taken to represent a good short-term solvency position. But this
standard ratio generally varies from industry to industry. Each industry has to develop its own
standard or ideal ratio from past experience and this can only be taken as a norm
Table 1 discloses the values of CR of the selected logistics and transport companies during
the study period. The table shows that the CR of Container Corporation& transport corporation was
higher as compared to conventional standard of CR in all the year of the study. It fluctuated between -
0.74 and 3.93. But the common mean value if all the five companies for ten years stood at 1.22.
Regarding CR of Jet airway the mean value is 0.05 which is very low as it failed to reach the
traditional norm. Between ten years the Ration fluctuated between -0.42 to 1.59. In 2006 only it was
satisfied from till 2015 the ratio is not satisfied is fluctuated and gradually declined. Thus Jet Airway
is not excellent performer in respect of short term about paying capability during the study period.
In spicejet, Current Ration between 2006 to 2015 is fluctuated between -0.16 to -0.74.On an
average,this ratio of the company was -0.74. It indicates that the company wascompetent enough to
meet its short-term obligations on time.
This table shows that the CR of Container Corporationwas higher as compared to the
conventional standard of CR in all the yearsunder study. It fluctuated between 3.36 in 2015 and 0.87
in 2006.On anaverage, the CR of Container Corporationwas 2.65 during the period under study. Thus,
ascompared to the conventional practice, liquidity position of Container Corporation was foundto be
satisfactory during the study period.
Company/Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Mean SD
Jet Airways 1.59 0.42 -
0.05 0.27 0.02
-
0.20
-
0.39
-
0.39
-
0.42
-
0.31 0.05 0.61
Spice jet -0.16 -0.32 0.01 -
0.34
-
0.40 0.40
-
0.11
-
0.21
-
0.57
-
0.74 -0.25 0.32
Container
Corporation 0.87 1.39 1.99 1.99 2.45 3.68 3.93 3.75 3.12 3.36 2.65 1.07
Transport
corporation 1.46 2.35 3.02 2.84 2.77 1.41 1.61 1.74 1.71 2.14 2.10 0.61
Aegis Logistics 1.65 1.86 0.72 0.35 1.57 1.49 1.70 1.67 2.25 1.88 1.51 0.56
Mean 1.08 1.14 1.14 1.02 1.28 1.36 1.35 1.31 1.22 1.27 1.22
SD 0.76 1.08 1.34 1.34 1.42 1.48 1.73 1.69 1.65 1.73
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The CR of Transport corporation was far abovethe traditional standard of 2:1 and registered a
fluctuating trendthroughout the study period. It ranged between 1.46 in the year 2006 and 2.14 in the
year 2015. On an average, it was 2.10 during the study.
With regard to the period of study, the mean Current Ratio is low in the year 2009 (1.02) and
it is very high (1.36) in the year 2011.
The results of mean of variation disclose that it is highly stable (-0.25) in the case of Spice jet
and it is highly fluctuating (2.65) in the case of Container Corporation.
TABLE:2 -
QUICK RATIO OF THE SELECTED COMPANIES FOR THE PERIOD 2006 TO 2015
INTERPRETATION
This ratio is a more rigorous measure of liquidity as compared to the current ratio. It is a
refinement of CR as it excludes nonliquid current assets such as inventories, prepaid expenses etc.
Thus by using it, the liquidity of a company can be judged more precisely. Conventionally, a quick
ratio of 1:1 is considered as satisfactory. In other words, if a company has quick ratio of at least 100
percent it is considered to be in a fairly good liquidity condition. Table 4.2 analyses the values of QR
of the selected companies during the study period.
Table 2 disclose the amount of Quick Ratio charged by the select sample logistics
transportation companies for 10 years ranging from 2006 to 2015.The amount of Quick Ratio is low -
0.76 in the case of Spice jet in the year 2015 and it is very high 3.91 in the case of Container
Corporation in the year 2012.
With regard to the period of study, the mean Quick Ratio is low in the year 2006 (0.95) and it
is very high (1.27) in the year 2012.
The results of mean of variation disclose that it is highly stable (-0.27) in the case of Spice jet,
and it is highly fluctuating (2.64) in the case of Container Corporation.
Company/Yea
r 2006
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
Mea
n SD
Jet Airways 1.30 0.22
-
0.18 0.09
-
0.15
-
0.47
-
0.58
-
0.56
-
0.56
-
0.36 -0.12 0.57
Spice jet
-
0.18
-
0.33
-
0.01
-
0.36
-
0.42 0.37
-
0.14
-
0.24
-
0.59
-
0.76 -0.27 0.31
Container
Corporation 0.86 1.39 1.98 1.99 2.44 3.67 3.91 3.73 3.10 3.34 2.64 1.07
Transport
corporation 1.43 2.34 3.00 2.83 2.76 1.40 1.59 1.72 1.70 2.12 2.09 0.61
Aegis
Logistics 1.35 1.69 0.55 0.28 1.40 1.35 1.58 1.51 2.02 1.71 1.34 0.53
Mean 0.95 1.06 1.07 0.96 1.21 1.26 1.27 1.23 1.13 1.21 1.14
SD 0.67 1.09 1.38 1.37 1.45 1.55 1.78 1.73 1.65 1.73
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TABLE:3
INVENTORY TURNOVER RATIO OF THE SELECTED COMPANIES FOR THE PERIOD
2006 TO 2015
INTERPRETATION
Inventory Turnover Ratio (ITR): This ratio measures the efficiency of inventory management
of a firm. If the inventory is efficiently managed, it will help in enhancing the liquidity of the firm. A
high ITR indicates a high level of efficiency in inventory management and it is good from the
liquidity point of view whereas a low ratio implies excessive inventory levels than warranted by
volume of operation. There is no „rule of thumb‟ for the ITR for interpreting the results. The norms
may be different for different industries which actually depend upon the nature of industry and
business conditions. Table 4.3 analyses the values of Inventory Turnover of the selected companies
during the study period.
Table 3 disclose the amount of Inventory Turnover Ratio charged by the select sample
logistics transportation companies for 10 years ranging from 2006 to 2015.The amount of Inventory
Turnover Ratio is low 3.57 in the case of Transport corporation in the year 2007 and it is very high
54.56 in the case of Spice jet in the year 2010.
With regard to the period of study, the mean Inventory Turnover Ratio is low in the year 2011
(16.60) and it is very high (29.89) in the year 2010.
The results of mean of variation disclose that it is highly stable (8.81) in the case of Transport
corporation, and it is highly fluctuating (26.69) in the case of Spice jet.
Company/Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Mean SD
Jet Airways 14.05 16.08 16.17 19.43 17.85 7.38 9.00 10.24 10.54 28.12 14.89 6.14
Spice jet 23.46 12.34 16.78 34.67 54.56 19.78 24.56 22.45 39.56 18.78 26.69 12.71
Container
Corporation 23.35 34.78 12.34 45.67 30.56 19.78 47.68 36.78 34.36 31.43 31.67 10.96
Transport
corporation 7.30 3.57 6.81 4.66 16.02 6.58 6.32 9.97 17.26 9.60 8.81 4.56
Aegis Logistics 20.06 37.21 32.15 5.38 30.48 29.46 34.54 30.70 20.86 23.74 26.46 9.31
Mean 17.64 20.80 16.85 21.96 29.89 16.60 24.42 22.03 24.52 22.33 21.70
SD 6.93 14.62 9.43 18.06 15.38 9.63 17.38 12.01 12.09 8.56
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TABLE:4
DEBTORS TURNOVER RATIO OF THE SELECTED COMPANIES FOR THE PERIOD
2006 TO 2015
INTERPRETATION
Debtors turnover ratio highlights credit and collection policy pursued by a firm. The quality
of debtors influences the liquidity of a firm. It tests the speed with which debtors are converted into
cash. The liquidity of a firm is directly influenced by this speed. Thus, debtors‟ velocity indicates the
efficiency of receivables management in a company. A High DTR reflects the promptness of debtors‟
collectivity i.e. smooth flow of liquidity and a low DTR indicates longer average collection period i.e.
shrinkage of liquidity and also proves inefficiency in credit management. There is no „rule of thumb‟
which may be used as a norm to examine the DTR. Different standards are generally used for
different industries in order to examine the DTR. Table 4.4 analyses the values of DTR of the selected
companies during the study period 2006 to 2015.
Table 4 disclose the amount of Debtors turnover Ratio charged by the select sample logistics
transportation companies for 10 years ranging from 2006 to 2015.The amount of Debtors turnover
Ratio is low 5.48 in the case of Transport corporation in the year 2013 and it is very high 91.15 in the
case of Container Corporation in the year 2014.
With regard to the period of study, the mean Debtors turnover Ratio is low in the year 2006
(21.04) and it is very high (34.24) in the year 2012.
The results of mean of variation disclose that it is highly stable (6.23) in the case of Transport
corporation, and it is highly fluctuating (74.42) in the case of Spice jet.
Company/Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Mean SD
Jet Airways 13.14 11.69 6.71 15.80 12.87 13.19 11.70 14.23 14.31 14.24 12.79 2.48
Spice jet 24.53 15.19 35.48 36.36 24.04 67.46 63.20 53.32 40.48 42.75 40.28 17.06
Container
Corporation 49.25 64.69 94.32 77.47 53.64 66.59 81.29 77.59 91.15 88.23 74.42 15.47
Transport
corporation 8.07 7.04 6.29 6.28 5.88 5.87 5.95 5.48 5.86 5.58 6.23 0.78
Aegis Logistics 10.21 9.69 9.65 17.03 13.88 12.47 9.05 13.12 18.31 9.53 12.29 3.30
Mean 21.04 21.66 30.49 30.59 22.06 33.12 34.24 32.75 34.02 32.07 29.20
SD 17.00 24.24 37.70 28.39 18.80 31.09 35.34 31.25 34.40 34.63
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TABLE:5
CURRENT ASSET TO TOTAL ASSET RATIO OF THE SELECTED COMPANIES FOR
THE PERIOD 2006 TO 2015
INTERPRETATION
It indicates the extent of total funds invested for the purpose of working capital and throws
light on the importance of current assets of a firm. It should be worthwhile to observe that how much
of that portion of total assets is occupied by the current assets, as current assets are essentially
involved in forming working capital and also take an active part in increasing liquidity. Thus, this
ratio should not be so large to ignore the application of the funds in fixed assets. Also care should be
taken that principal investment of the firm should be in the operating items. This key ratio is
important from the view point of liquidity. The higher CATA, the higher is liquidity and vice-versa.
Table 4.5 analyses the values of CATA of the selected companies during the study period 2006 to
2015.
Table 5 disclose the amount of Current asset to Total asset Ratio charged by the select sample
logistics transportation companies for 10 years ranging from 2006 to 2015.The amount of Current
asset to Total asset Ratio is low -10.13 in the case of Spice jet in the year 2015 and it is very high 0.50
in the case of Container Corporation in the year 2012.
With regard to the period of study, the mean Current asset to Total asset Ratio is low in the
year 2015 (1.94) and it is very high (0.36) in the year 2011.
The results of mean of variation disclose that it is highly stable (-1.93) in the case of Spice jet,
and it is highly fluctuating (0.39) in the case of Transport corporation.
Company/Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Mean SD
Jet Airways 0.32 0.11
-
0.02 0.05 0.00
-
0.10
-
0.33
-
0.50
-
0.81 -0.65 -0.19 0.36
Spice jet -0.06 -0.34 0.01
-
3.26
-
3.08 0.77
-
0.20
-
0.23
-
2.78
-
10.13 -1.93 3.23
Container
Corporation 0.18 0.28 0.37 0.36 0.40 0.46 0.50 0.46 0.41 0.38 0.38 0.09
Transport
corporation 0.36 0.38 0.39 0.39 0.42 0.38 0.37 0.39 0.38 0.39 0.39 0.02
Aegis Logistics 0.34 0.46 0.25 0.12 0.32 0.29 0.30 0.28 0.33 0.32 0.30 0.08
Mean 0.23 0.18 0.20
-
0.47
-
0.39 0.36 0.13 0.08
-
0.49 -1.94 -0.21
SD 0.18 0.32 0.19 1.57 1.51 0.31 0.37 0.42 1.38 4.60
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TABLE:6
CASH TURNOVER RATIO OF THE SELECTED COMPANIES FOR THE PERIOD 2006
TO 2015
Company/Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Mean SD
Jet Airways 12.38 20.40 28.44 38.78 56.82 21.67 29.76 20.13 15.11 9.46 25.30 14.10
Spice jet 12.14 51.44 55.22 47.36 16.99 50.77 16.72 25.80 63.75 52.02 39.22 19.10
Container
Corporation 33.63 8.19 20.09 28.75 44.12 1.25 1.43 1.92 2.46 2.01 14.39 16.07
Transport
corporation 38.59 23.79 34.68 55.35 25.55 46.39 61.38 86.49 85.65 35.18 49.30 22.70
Aegis Logistics 2.12 6.89 7.63 5.43 3.99 3.72 3.85 5.63 6.26 5.65 5.12 1.67
Mean 19.77 22.14 29.21 35.13 29.49 24.76 22.63 27.99 34.65 20.86 26.66
SD 15.58 17.97 17.72 19.33 21.11 23.18 24.44 34.16 37.65 21.75
INTERPRETATION
This ratio indicates the number of times the cash amount is turned over during the accounting
period. It measures the efficiency of cash management. The higher CTR, the higher is the efficiency
of cash management and vice-versa. It is difficult to develop any standard ratio in this respect. It can
be only judged by a particular firm or industry only from his past experience.
Table 6 disclose the amount of Cash Turnover Ratio charged by the select sample logistics
transportation companies for 10 years ranging from 2006 to 2015.The amount of Cash Turnover Ratio
is low 1.25 in the case of Container Corporation in the year 2011 and it is very high 86.49 in the case
of Transport corporation in the year 2013.
With regard to the period of study, the mean Cash Turnover Ratio is low in the year 2006
(19.77) and it is very high (34.24) in the year 2014.
The results of mean of variation disclose that it is highly stable (5.12) in the case of Aegis
Logistics, and it is highly fluctuating (49.30) in the case of Transport corporation.
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FINAL LIQUIDITY RANKING BASED ON BOTH AVERAGE AND CONSISTENCY OF
THE SELECTED LIQUIDITY MEASURES
INTERPRETATION
An effort was made to assess the overall liquidity of the selected companies in each selected
industry more precisely by assigning ranking on the basis of: i) Average and ii) Consistency of the
selected parameters of liquidity. In the process of ranking six ratios, namely, current ratio (CR), Quick
ratio (QR), Inventory turnover ratio (ITR), Debtors turnover ratio (DTR), Current assets to total assets
ratio (CATA) and Cash turnover ratio (CTR) were combined in a point score. In the first step a
comprehensive rank test considering the average values of all the selected measures of liquidity was
made. In case of average the higher the value, the greater is the liquidity and ranking was done in that
order. Ultimate ranking was done on the basis of the principle that the lower the aggregate of
individual ranks the more favorable is the liquidity position. Ultimate ranking was done on the
principle that the lower the aggregate of individual ranks the more favorable is the liquidity position
and vice-versa. In the third step, final ranking was done on the basis of both average and consistency.
Here „rank based on average‟ and „rank based on consistency for each of the selected companies were
added to arrive at its sum of ranks which was ultimately used to ascertain its final liquidity rank. Final
ranking was done on the principle that the lower the aggregate of „rank based on average‟ and „rank
based on consistency‟, the more favorable is the liquidity position and vice versa.
In the Table 4.9 an attempt was made to assign ranks to the selected logistics and transport
companies on the basis of average of the selected parameters of liquidity. Similarly both Jet airways
had a combined score of 23 each, Aegis Logistics 21 and Spice jet 18, Container Corporation and
Transport corporation had a combined score is 13.
FINDINGS
The following paragraphs make a summary of the findings of this study
The liquidity of the selected companies was analyzed during the period under study by using
some traditional liquidity ratios such as current ratio, quick ratio, inventory turnover ratio,
debtors turnover ratio, current assets to total assets ratio. These ratios of the companies under
study were compared with their respective industry average. While making such comparison
on the basis of mean of these ratios, the following comments can be made:
The analysis of CR shows that our of five companies three companies were able to prove
themselves as good performers in terms of their short term debt-paying capability
Ranking/
Company
Based on
Average
Based on
Consistency Total Ranks Final Rank
Jet airways 5 3 8 5
Spice jet 3 2 5 2.5
Container
Corporation 1 1 5 2.5
Transport
Corporation 2 4 6 4
Aegis Logistics 4 5 9 1
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QR is a more conservative version of current ratio. It measures the firm‟s ability to pay its
immediate obligations using its liquid assets. Conventionally, a quick ratio of 1:1 is
considered as satisfactory. In other words, if a company has a quick ratio of at least 100
percent it is considered to be in a fairly good liquidity condition. Out of five companies three
companies found to be satisfied it indicates that those are immediate debt paying capability
was satisfactory throughout the study period.
The analysis of ITR of the selected companies discloses that in three selected companies
maintained lower ITR as compared to the industry average during the years under study and
in the remaining two cases the average ITR values were higher as compared to the industry
benchmark for ITR. It implies that the activity of such three companies in managing their
inventories was highly unsatisfactory during the study period.
The examination of DTR in the selected companies reveals that two companies are
satisfactory liquidity position based on age of debtors and remaining three are failed to mange
age of debtors.
The empirical evaluation of CATA shows that selected companies not maintained higher
CATA as compared to the industry average during the years under study so It indicates that
there is no more emphasis on working capital investment as compared to their fixed assets
investment.
As per the combined score based on both average values and consistency parameters, all the
selected companies which obtained a combined score above 5 and Spice jet and Container
corporation occupies first place.
SUGGESTION
Both jet airways and spice jet reserve to remove poor liquidity position of the above two
company‟s further investment is required to be bringing in the form of liquid resource for
significant reduction in the weigh down of current liabilities in order to improve liquidity
position.
Transport corporation is required to follower inventory control system, such as COQ, JIT,
ABC analysis etc and improvement of their sales management so as to reduce pacing of
finished goods.
Proper composition of net current assets should be sustained by means of the indexes of the
companies.
Proper administration of net current assets should be indispensable for smooth running of
business at the same time maximization of assets as well as minimization of liabilities should
be preserved.
Cash management performance should be progressed to improve liquidity position by way of
accurate forecasting and scheming of cash.
CONCLUSION
Logistics sector Reforms have changed the face of Indian logistics and transport industry. The
reforms have led to the increase in resource productivity, increasing level of deposits, credits and
profitability. However, the profitability, which is an important criteria to measure the performance of
banks in addition to productivity, financial and operational efficiency has come under pressure
because of changing environment of the company. An efficient management of banking operations
aimed at ensuring growth in profits and efficiency requires up-to-date knowledge of all those factors
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on the company profit. In recent year, there have been considerable pressures on the profitability of
the company.
A lower profitability may rise due to lack of control over the expenses. Company is urged to
generate sufficient revenue to meet the rising cost of fund. Profitability is a key result area where
performance and results directly and virtually affect the survival. Therefore, every company should
aim at increasing their performance for earning profits by rendering best and quality products and
services to the customers and for their survival as well.
REFERENCES
MedhatTarawneh (2006) - “A Comparison of Financial Performance in the Banking Sector”,
Asian Journal of Finance & Accounting, 2013, Volume 5 (1), pp. 259 – 273.
Sanjay J. Bhayani (2006) - “Performance of the New Indian private sector banks: a
comparative study”, International Journal of Marketing, Financial Services & Management
Research, Volume 1 (11), November 2012, pp. 117 – 131.
Manish Mittal and ArunaDhade (2007) - “Profitability and productivity in Indian banks a
comparative study”, Zenith International Journal of Multidisciplinary Research, Volume 2
(1), January 2012, pp. 255 – 269.
Nadim Jahangir and Shubhankar Shill (2007) - “An empirical investigation on commercial
banks profitability in Bangladesh”, International Conference on Applied Economics, 2010,
pp. 261 – 271.
Mrs. SangeetaArora and Ms. ShubpreetKaur (2009) - “Internal determinants for
diversification banks in India an Empirical analysis”, Caspian Journal of Applied Sciences
Research, Volume 2 (3), 2013, pp. 128 – 138.
INTERCONTINENTAL JOURNAL OF FINANCE RESEARCH REVIEWISSN:2321-0354 - ONLINE ISSN:2347-1654 - PRINT - IMPACT FACTOR:1.552VOLUME 4, ISSUE 3, MARCH 2016
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