Factors influencing short-term solvency in Indian automobile industry

  • Authors

    • Joji Abey
    • R Velmurugan
    2018-04-20
    https://doi.org/10.14419/ijet.v7i2.21.12461
  • Liquidity, short-term solvency, automobile industry, current ratio.
  • The automobile industry in India occupies a vital role in the economic progress of the nation. The reputation of any industry depends on its liquid position, which helps a company in settling their dues in time. Liquidity denotes to the firm’s capacity to pay their outstanding dues. The article considers liquidity position of automobile industry by employing correlation and regression test. The data required for the study is secondary in nature. The required data are collected from Capitaline database for the period ranging between 2008 and 2017. The collected data is analyzed by making use of correlation and regression. The result reveals that liquidity position of a company depends on age, inventory turnover ratio, dividend payout ratio and leverage.

     

     

  • References

    1. [1] Amit KC, “Working Capital Management: An Empirical Studyâ€, Southern Economist, (2005).

      [2] Chiou J & Cheng L, “The Determinants of Working Capital Managementâ€, Journal of American Academy of Business, Vol.10, No.1, (2006), pp.149-155.

      [3] Mansoori DE & Muhammad D, “Determinants of working capital management: Case of Singapore firmsâ€, Research Journal of Finance and Accounting, Vol.3, No.11, (2012), pp. 15-23.

      [4] Eljelly A, “Liquidity - Profitability trade - off: An empirical investigation in an emerging marketâ€, International Journal of Commerce and Management, Vol.14, No.2, (2004), pp. 48-61.

      [5] Farai K & Merle H, “Determinants of Working Capital Investment in South Africa: Evidence from Selected JSE-Listed Firmsâ€, Journal of Economics and Behavioral Studies, Vol.6, No.7, (2014), pp. 569-580.

      [6] Fidel AA, James IU & Samuel MT, “Determinants of Working Capital Managementâ€, International Journal of Economics, Commerce and Management, Vol.3, No.2, (2015).

      [7] Gill A, “Factors That Influence Working Capital Requirement in Canadaâ€, Economics and Finance Review, Vol.1, No.3, (2011), pp.30 – 40.

      [8] Hill M, Kelly G & Highfield, MJ, “Net Operating Working Capital Behavior: A First Lookâ€, Financial Management, Vol.39, No.1, (2010), pp. 783-805.

      [9] Karamjeet SFCA, “Determining Working Capital Solvency Level and Its Effect on Profitability in Selected Indian Manufacturing Firmsâ€, ICBI 2010 - University of Kelaniya, Sri Lanka, (2010).

      [10] Mauleshkumar NJ, “A Study of Components of Current Assets for Selected Industries of Indiaâ€, M.S.University of Baroda, Vadodara, (2011).

      [11] Mian Sajid N & Talat A, “Impact of Aggressive Working Capital Policy on Firm’s Profitabilityâ€, The ICFAI Journal of Applied Finance, Vol.15, No.8, (2009), pp.19-30.

      [12] Mukhopadhyay D, “Working Capital Management in Heavy Engineering Firms A Case Studyâ€, The Management Accountant, Vol.39, No.4, (2004), pp. 317-323.

      [13] Namita S, “Determinants of Leverage of Indian Companies: An Empirical Analysis (A Study of Cement Industry in India)â€, The International Journal of Business & Management, Vol.2, No.3, (2014).

      [14] Nazir MS & Afza T, “Working Capital Requirements and the Determining Factors in Pakistanâ€, The ICFAI Journal of Applied Finance, Vol.15, No.4,
      (2009), pp.28-37.

      [15] Nazirmian S & Nazirmian S, “On the Factor determining Working Capital Requirementsâ€, ASBBS, Vol.15, No.1, (2008), pp.293-301.

      [16] Negi P, Sankpal S, Chakraborty A & Mathur G, “Working Capital Management and Firm's Performance -A Study of Indian Manufacturing Companiesâ€, Abhigyan, Vol.28, No.1, (2010).

      [17] Palani A & Yasodha P, “A Study on Working Capital Management in Loyal Textile Mills Limited, Chennaiâ€, South Asian Academic Research Journals,
      Vol.2, No.5, (2012), pp.156-173.

      [18] Palombini NVN & Nakamura WT, “Key Factors in Working Capital Management in the Brazilian Marketâ€, RAE, Vol.52, No.1, (2012), pp. 55-69.

      [19] Ranjith A, “The Impact of Firms’ Capital Expenditure on Working Capital Management: An Empirical Study across Industries in Thailandâ€, International Management Review, Vol.4, No.1, (2008), pp. 8-21.

      [20] Sen M & Oruc E, “Relationship between Efficiency Level of Working Capital Management and Return on Total Assets in ISEâ€, International Journal of Business and Management, Vol.4, No.0, (2009), pp.109-114.

      [21] Singh P, “Inventory and Working Capital Management: An Empirical Analysisâ€, The ICFAI Journal of Accounting Research, Vol.7, No.2, (2008), pp.53-73.

      [22] Solanki AH, “Working Capital Management in Selected Small Scale Industries of Gujarat Stateâ€, Saurashtra University, Rajkot, (2009), pp. 85-98.

      [23] Zariyawati M, Taufiq H & Sazali A, “Determinants of Working Capital Management: Evidence from Malaysiaâ€, International Conference on Financial Theory and Engineering, (2010), pp.190-194.

  • Downloads

  • How to Cite

    Abey, J., & Velmurugan, R. (2018). Factors influencing short-term solvency in Indian automobile industry. International Journal of Engineering & Technology, 7(2.21), 436-439. https://doi.org/10.14419/ijet.v7i2.21.12461