An Analytical Study of Liquidity and Assets Management Ratio of Selected Automobile Company in India

Kishankumar M. Rathod; Abhishek D.  Pandya

doi:10.56209/jommerce.v1i1.5

Authors

Kishankumar M. Rathod Assistant Professor at Satya Prakash College, Rajkot, India
Abhishek D. Pandya Department of Commerce, Saurashtra University Rajkot, India

DOI:

https://doi.org/10.56209/jommerce.v1i1.5

Keywords:

Liquidity, Assets Management, Performance

Abstract

The primary objective of this research is to assess the liquidity and asset management positions of selected vehicle manufacturers and to give recommendations for improving their liquidity and asset management positions. The current research spans five years, from 2015-2016 to 2019-2020. Three organizations were chosen for this research, and five ratios were calculated: the current ratio, the liquidity ratio, the working capital turnover ratio, the total asset turnover ratio, and the fixed asset turnover ratio. ANOVA was employed to test the hypothesis. The research's principal results reveal that there is no statistically significant variation in the different asset management and liquidity ratios of chosen vehicle businesses during the study period. According to data interpretation, the comparison of all the selected three automobile industry's ratios indicates that Maruti Suzuki Ltd. is in a better position than the other selected automobile companies, as its average of the selected ratios is 12.85, which is higher than the other selected automobile companies. Thus, Maruti Suzuki Ltd. outperforms the other automotive manufacturers.

References

Bagchi, B., Chakrabarti, J., & Roy, P. B. (2012). Influence of working capital management on profitability: a study on Indian FMCG companies. International Journal of Business and Management, 7(22), 1.

Bhunia, A., & Khan, I. U. (2011). Liquidity management efficiency of Indian steel companies (a case study). Far East Journal of Psychology and Business, 3(3), 3-13.

Chakraborty, S., & Mohapatra, S. (2009). An Empirical Study of Asset Liability Management Approach by Indian Banks. Available at SSRN 2646403.

DeAngelo, H., DeAngelo, L., & Wruck, K. H. (2002). Asset liquidity, debt covenants, and managerial discretion in financial distress:: the collapse of LA Gear. Journal of financial economics, 64(1), 3-34.

Kumar, D., & Rahman, Z. (2016). Buyer supplier relationship and supply chain sustainability: empirical study of Indian automobile industry. Journal of Cleaner Production, 131, 836-848.

Owolabi, S. A., & Obida, S. S. (2012). Liquidity management and corporate profitability: Case study of selected manufacturing companies listed on the Nigerian stock exchange. Business Management Dynamics, 2(2), 10-25.

Suresh, G., & Krishnan, P. A. (2018). Asset-Liability Management as a Risk Management Tool in Commercial Banks in India. IUP Journal of Bank Management, 17(1).

Trivedi, J. C. (2015). A Z-Score Analysis on Working Capital Management Of The Selected Listed Cement Indian Companies. SAMVAD, 9, 49-58.