Research and Assessment of Profitability and Liquidity Position of Selected Iron and Steel Firms in India

Abstract

This paper has documented the analysis and assessment of “Profitability and Liquidity position of selected Iron and Steel firms in India”. The data have been collected from the Balance sheet and Profit & Loss A/C of the selected Companies as a secondary data. The financial tools used under the study are ratio analysis with solvency and profitability ratios. It helps is knowing the present position of current assets, fixed assets, current liabilities and Non-current liabilities of the Industry. In this study Profitability ratios serves as overall measures of the effectiveness of the Industry’s management. Profitability ratio includes the net profit ratio, return on total assets, operating profit margin, and income return on investment.
It measures the amount by which an Industry’s revenue exceeds its relevant expenses. The profit of a business is the difference between its revenue and its cost. Every stakeholder has interest in the liquidity position of a company. Thus, a company needs to maintain adequate liquidity so that liquidity greatly affects profits of which some portion that will be divided to shareholders. Liquidity and profitability are closely related because one increases the other decreases.