The Impact of Liquidity Management on Profitability of Steel Authority of India Limited (SAIL): An Empirical Assessment

Abstract

In the financial performance of a firm liquidity management plays crucial role which is driven by several financial mechanism explained by ratios. The present study has been carried out to judge the impact of liquidity and working capital management over the profitability of Steel Authority of India Limited (SAIL) which is an indication of the operational and overall efficiency. It studies ability of SAIL’s investment and return emphasising on measurement and analysis of liquidity on the profitability performance of Steel Authority of India Limited (SAIL) for the accounting period of 15 years from 2005-06 to 2019-20. The ratios representing liquidity and working capital as well as profitability have been used for correlation and regression model to reach the inference. Return on Capital Employed has been taken as dependent variable and current ratio, liquid ratio, total debt/equity, inventory turnover ratio, and interest coverage ratio have been considered as explanatory.