Trade-off between Profitability and Liquidity: An Analytical Study on Asian Paints Limited
G.S. Yogesh Ram
, P. Ramachentrayar
Average Growth Rate (AGR), Coefficient of Variation (C.V.), Financial Analysis, Financial Statements, Asian Paints Limited, Standard Deviation (S.D.).
Profitability and liquidity are essential components of a company's financial strategy, often requiring careful balancing to ensure long-term success. Profitability measures a business's ability to generate income relative to its expenses, reflecting its overall efficiency and effectiveness in the market. In contrast, liquidity refers to the ease with which a company can convert its assets into cash to meet immediate financial obligations. When a business prioritizes profitability, it may choose to reinvest earnings into growth opportunities, such as expanding operations or developing new products. This can lead to higher profits in the long run but may simultaneously decrease liquidity, as funds are tied up in long-term investments. On the other hand, a focus on liquidity might involve maintaining significant cash reserves or investing in short-term securities, which can ensure that the company meets its short-term liabilities. However, this approach may limit potential earnings growth, as cash is not being utilized for potentially lucrative investments. Therefore, companies must navigate this trade-off carefully, as an imbalance can lead to financial distress, where a lack of liquidity hinders operational capabilities, or missed opportunities for profit generation. Ultimately, a strategic approach that considers both profitability and liquidity is essential for achieving sustainable growth and maintaining a competitive edge in the market.
"Trade-off between Profitability and Liquidity: An Analytical Study on Asian Paints Limited", IJNRD - INTERNATIONAL JOURNAL OF NOVEL RESEARCH AND DEVELOPMENT (www.IJNRD.org), ISSN:2456-4184, Vol.9, Issue 10, page no.b454-b466, October-2024, Available :https://ijnrd.org/papers/IJNRD2410150.pdf
Volume 9
Issue 10,
October-2024
Pages : b454-b466
Paper Reg. ID: IJNRD_301227
Published Paper Id: IJNRD2410150
Downloads: 00065
Research Area: Commerce and Management, MBA All Branch
Country: Madurai, Tamil Nadu, India
ISSN: 2456-4184 | IMPACT FACTOR: 8.76 Calculated By Google Scholar | ESTD YEAR: 2016
An International Scholarly Open Access Journal, Peer-Reviewed, Refereed Journal Impact Factor 8.76 Calculate by Google Scholar and Semantic Scholar | AI-Powered Research Tool, Multidisciplinary, Monthly, Multilanguage Journal Indexing in All Major Database & Metadata, Citation Generator
Publisher: IJNRD (IJ Publication) Janvi Wave
