Year: 2016 | Month: July | Volume: 3 | Issue: 7 | Pages: 36-40
Liquidity and Profitability Study of Various Industries with Emphasis on Chemical and Allied Industries
Sunil J. Kulkarni
Datta Meghe College of Engineering, Airoli, Navi Mumbai, Maharashtra, India.
Profitability can be measured by various profitability methods such as ROR (rate of return), NPV (net present worth), IRR (internal rate of return), capitalized cost, payback period etc. The fixed and working capital contributes to total capital investment. The high rate of return needs lower operational cost. This reduces the inventory and decreases liquidity. There has to be optimization of the various factors for healthy and long term viable operation of industry. The chemical, pharmaceutical, oil, paint and plastic industries across the world are facing different kind of economical problems. These problems are related to competition, environmental regulations, government licensing system and social and geographical issues as well as political constraints. This paper reviews the profitability and liquidity analysis carried out by various investigators.
Key words: Rate of return, capital, investment, liquidity, policy, leverage, finance, resources.