Analysis of short-term financial performance of J K Paper Limited-A case study

Liquidity management is one of the vital roles performed by a finance manager. The present study throws light on effectiveness and understanding on what extent, the theoretical concept of liquidity management are practiced by JKPL. The study based on the secondary data collected from annual reports for the period 2001–2011. The tools used for the purpose of analysis are ratio analysis, Spearman's rank correlation, multiple linear regression, ANOVA and Student's ‘t‟ test. The analysis of liquidity management of JKPL reveals that overall liquidity management over the period of study was satisfactory. There is no significant correlation between ranked data of liquidity and profitability. Multiple regression result reveals that total current liabilities has a significant influence on size of total current assets where as, sales and total current assets show independent variation at 5% level of significance. It is suggested to maintain a definite proportion of total current assets in relation to sales to keep an adequate quantum of liquidity at all the time.