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Liquidity management efficiency of Indian Steel Companies (a Case Study)

Author

Listed:
  • Dr. Amalendu Bhunia

    (Reader in Commerce Fakir Chand College under University of Calcutta Diamond Harbour, West Bengal, India)

  • Islam Uddin Khan

    (Assistant Professor in Commerce Kaliyaganj College under University of Gour Banga Uttar Dinajpur, West Bengal, India)

Abstract

Liquidity management is of crucial importance in financial management decision. The optimalof liquidity management is could be achieve by company that manage the trade-off between profitability and liquidity management. The paper analyses the association between the liquidity management and profitability of 230 Indian private sector steel companies obtained from CMIE database. Liquidity management indicators and profitability indicator over the period from 2002 to 2010 are modeled as a linear regression system in multiple correlation and regression analysis. Evidence of petite association between those variables is found.A descriptive statistics discloses that liquidity and solvency position is very satisfactory and relatively efficient liquidity management is found. Multiple regression tests confirm a lower degree of association between the liquidity management and profitability.

Suggested Citation

  • Dr. Amalendu Bhunia & Islam Uddin Khan, 2011. "Liquidity management efficiency of Indian Steel Companies (a Case Study)," Far East Journal of Psychology and Business, Far East Research Centre, vol. 3(1), pages 3-13, June.
    • Handle: RePEc:fej:articl:v:3c:y:2011:i:1:p:3-13
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    References listed on IDEAS

    as
    1. Pradeep Singh, 2008. "Inventory and Working Capital Management: An Empirical Analysis," The IUP Journal of Accounting Research and Audit Practices, IUP Publications, vol. 0(2), pages 53-73, April.
    2. Pedro Juan García‐Teruel & Pedro Martínez‐Solano, 2007. "Effects of working capital management on SME profitability," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 3(2), pages 164-177, April.
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    Cited by:

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    More about this item

    Keywords

    Secondary data; multiple regression analysis; financial management; India; steel;
    All these keywords.

    JEL classification:

    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration

    Statistics

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