Profitability, Liquidity and Financial Risk Analysis: A Study of Auto Industries in India

The concept of Financial Leverage is one of the important areas of making financial decision. The leverage protects the interest of the shareholders in terms of the profit maximization at low cost of capital. The profit of a company is distributed in the form of dividend to their existing shareholders. This paper seeks to analyze the liquidity, Profitability and the financial leverage of the selected automobile companies operating in India. The study was conducted for a period of six years from 2008-09 to 2013-14. Relevant statistical tools and techniques have been applied to conduct the study. The study concludes that that there is significant difference in the CR, QR, ROI and ROE of the selected companies during the study period. The study also revealed that there is no significant difference in the financial leverage ratio.