Impact of Liquidity Management on Profitability: A Case Study of Lanco Industries Limited (LIL), Srikalahasthi (AP)

The study mainly focus on to study the impact of liquidity management on profitability of Lanco Industries Lid, Srikalahasti(AP).To accomplish these research objectives, data were collected from 2004-2005-to-2009-10 from annual reports of Lanco Industries Ltd, Srikalahasti(AP).The principal tools for assessing the impact of liquidity management on profitability with the help of selected ratios such as Size of Working Capital ,Current Ratio, Absolute Liquidity Ratio, Current Assets to Total Assets, Current Assets to Turnover Ratios, Working Capital Turnover Ratio, Debtor Turnover Ratio ,Average Collection Period, Return on Equity (ROE) and Rank Correlation were utilized. The results reveals that liquidity assets were not maintained sufficiently to meet the creditors obligation, current assets were not maintain properly, the average collection period is very high and negative correlation between liquidity and profitability. The few suggestions have been offered to improve the above problems, but the overall liquidity position of the Lanco Industries Ltd, Srikalahasti (AP) is good.