EFFICIENCYANALYSIS - A STUDY OF LIQUIDITYAND PROFITABILITY

Abstract

The overall efficiency is important from the viewpoint of the impact of short-term liquidity process on the profitability. Management of working capital is always considered, among others, as the vital factor that decides success or failure of business enterprises. Profitability of the business may be dependent on many factors including the adequacy of liquidity level as well as debt-paying ability of a concern because inadequate level of liquidity impairs profitability. Liquidity-profitability relationship is linked with the continuance of the appropriate intensity of working capital. The study aims to provide the reader with appropriate information for sharper decision-making on liquidity-profitability relationship with the help of multiple correlations and multiple regression analysis.