“LIQUIDITY MANAGEMENT OF SELECTED TRANSPORTATION COMPANIES …icmrr.org/global/pdffiles/IJFRR/f201603007.pdf · · 2016-03-25“LIQUIDITY MANAGEMENT OF SELECTED TRANSPORTATION

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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

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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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.


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


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.


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.


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


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


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

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Nadim Jahangir and Shubhankar Shill (2007) - “An empirical investigation on commercial

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