Liquidity Management in PSUs in Post-Reform Era: A Case Study of Bhel
The Management Accountant, Vol 48, No 8, August 2013
124 Pages Posted: 16 Jan 2015
Date Written: August 2013
In this study an effort was made to asses the liquidity performance BHEL for the period from 2000-01 to 2011-12. A significant declining trend in the short-term debt paying capability as well as the immediate debt paying capability of BHEL was noticed during the study period. Moreover, the efficiency in inventory management and cash management of the company stepped down notably with the passage of time during the period under study. All these negative attributes had definitely an adverse impact on the overall liquidity status of the company. This is also reflected in the outcome derived from the comprehensive rank test which indicates that there was a clear deterioration in the overall liquidity of the company during the second half of the study period. Another notable outcome of the study is that the association among the major liquidity indicators of the company during the study period was very significant. The study also reveals that there was a remarkable improvement in the overall profitability of BHEL throughout the period under study, although the company was not able to enhance the efficiency of its inventory management, debtors management and cash management during the same period.
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