Abstract
As cement industry, is base for the development other industries and economic development of a country, it is important to study the performance of cement industry? The study aimed to analyze liquidity management and its relationship with profitability of ACC Ltd and Ambuja Cements Ltd. during the study period of ten years from 2004-05 to 2013-14. The study used secondary data for analysis; they were collected from annual reports of the respective companies. The study used ratio analysis as financial tool and mean, standard deviation, co-efficient of variation and correlation analysis as statistical tools. The study found that liquidity performance of Ambuja cements was better than ACC Ltd. in terms of current ratio. But both the companies managed their collection and payments very efficiently. These companies collected their dues from customers as quick as possible and they delayed the payments to their creditors as long as possible. It was also found that average payments period, inventory conversion period and cash conversion period had significant relationship with profitability of the company, of which cash conversion period had negative relationship. In case of Ambuja cements no liquidity ratios had significant relationship with profitability.
Key Words: Liquidity, profitability, collection period, payments period, current assets.
References
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