Does Liquidity Affect a Firm’s Profitability? A Case of Automobile Companies in India

Mr. SUDHARSANA REDDY PUJARI; Dr. Muthu Gopalakrishnan Mariyappa

doi:https://doi.org/10.17492/jpi.mudra.v9i1.912208

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Does Liquidity Affect a Firm’s Profitability? A Case of Automobile Companies in India

SUDHARSANA REDDY PUJARI, Muthu Gopalakrishnan Mariyappa

Vol 9 , Issue 1 , January - June 2022 | Pages: 129-151 | Research Paper

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https://doi.org/10.17492/jpi.mudra.v9i1.912208

Published Online: June 30, 2022

Author Details ( * ) denotes Corresponding author

1. * SUDHARSANA REDDY PUJARI, Assistant Professor, Management, CMS Business School Jain deemed to be University, Bangalore , Karnataka, India (pujarisudharsanareddy@gmail.com)

2. Muthu Gopalakrishnan Mariyappa, Associate Professor, Management, Christ University, Bangalore , Karnataka, India (muthulinks@yahoo.co.in)

The present study aims to examine the nature and strength of the relationship between liquidity and profitability and for that, all automobile companies listed in the BSE and NSE are selected. Accounting information for calculating the liquidity and profitability ratios of the selected companies has been extracted from the Annual reports of those companies for the period 2000-01 to 2019-20.Statistical tools like correlation and multiple regression have been applied to examine the nature and direction of the relationship between liquidity and profitability variables. The results of the multiple correlation techniques evidenced that there is no uniformity in the nature, strength, and direction of the relationship between liquidity and profitability ratios, and even the results of the multiple regression techniques evidenced that there is no uniformity in the output.

Keywords

Liquidity; Profitability; Correlation; Regression; Automobile companies

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