An efficient management of long term solvency of a firm is extremely important to meet its long term obligations and smooth running of the business. The failure of a firm to meet its long debts due to lack of sufficient fund may result in loss of creditors and bankers confidence on business. Long term solvency reflected by proportion of debt and owners funds, so it must ensures that it has an appropriate mixture of both and the company has a balanced capital structure. This balance capital structure affects control of the firm and the profitability both.
Considering the above facts, in this paper, long term solvency of Central Coalfield Ltd (CCL) is studied and analysed for the period 2006–07 to 2015–16 (ten years period) using selective capital structure ratios to find out a picture of long term solvency with respect to industry (CIL) during the said period. This analysis helps to understand the financial standing and capability of CCL. Some statistical tools have been used in this study namely, arithmetic mean, standard deviation, coefficient of variation, Pearson's correlation coefficient analysis and student's “t ”test to test the hypothesis for further interpretation of tabulated data. An attempt has been made in this paper to find out comparative strength and weakness of different aspect of long term solvency of CCL.
A Study on Central Coalfield Limited
