Liqudity and Financial Health Analysis of Selected Commercial Vehicle Manufacturing Firms in India

Abstract

The commercial vehicle industry is one of the core industries which determine the
nation’s economic growth. This segment is the seventh largest producer of commercial
vehicle in the world and anticipated to march towards fifth position by year 2022. As a result
it is incredibly important to administer the funds in a competent way. It is apparent to track
the growth of the industry through the lens of financial management. Since, it is important to
manage the funds of the business in an effective manner. Hence, the financial management
both long term and short term comes into the picture. The financial management can be
scrutinized through the sound analysis of the liquidity, solvency and financial health. Keeping
this presumption in mind, the researcher is interested to undertake this study to analyse the
liquidity, solvency and financial health of selected commercial vehicle manufacturing firms
in India. The important statistical tool Ratio analysis and Z-Score model were employed by
the researcher to analyse the ten years financial data of chosen five NSE and BSE listed
commercial vehicle manufacturing firms in India. The core findings of the study comprises
poor liquidity management of all firms, better solvency management in SML and EML and
the financial health is poor in all firms except EML.