Impact of liquidity ratios on profitability (a case study of acc ltd Company)

Profitability ratios play a very important role in the financial position of the enterprise. Every firm has to maintain the relationship between liquidity and profitability while conducting day to day operations. Liquidity position of a company is very important for every stakeholder. Before selling goods on credit, the supplier of goods checks the liquidity of the company. Employees of the company are also concerned about the company's liquidity to know whether the company can meet the employee related obligations-salary, pension, provident fund, etc. Thus, a company needs to maintain adequate liquidity, as liquidity greatly affects profits and some portion of profits will be divided to shareholders. Liquidity and profitability are closely related because one increases the other decreases. Both liquidity and profitability are necessary for the short term and long term survival, growth and expansion of the business. With this research paper we try to find out the impact of liquidity on profitability of ACC ltd.