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The policy of ‘Make in India’ being given the major thrust, the manufacturing has emerged as one of the high growth sectors in India. Of various products of industrial, agricultural and household needs, PVC pipes are of multifarious utility and hence needed in all segments for both water supply and in laying concealed wiring in buildings. Hence, there is a stiff competition among the firms producing PVC pipes in India. However, the success of a firm depends on its financial soundness, particularly the liquidity and profitability levels. Liquidity refers to the ability of a concern to meet its current obligations as and when these become due. The profitability acts as a yardstick to measure the operating efficiency of the enterprise. The present study analyses and compares the liquidity and profitability position of the two leading PVC manufacturing companies listed in both NSE and BSE, namely Astral Poly Technik Ltd and Finolex Industries Ltd. The financial data of the past ten years from 2007-08 to 2016-17 was used. Accounting ratios, Motaal’s comprehensive test of liquidity and Spearman’s rank correlation coefficient are the tools used for the analysis. The study indicates that there is a positive correlation between liquidity and profitability in case of Astral Poly Technik Ltd, while a negative correlation in case of Finolex Industries Ltd.


Correlation, Inventory, Liquidity, Profitability, Working Capital.
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