International Journal of Management (IJM)

Source ID:00000011
Volume 3, Issue 1,January- April 2012, Pages 149-159, Page Count - 11

SOLVENCY ANALYSIS ON PUBLIC SECTOR UNDERTAKING: A CASE STUDY ON NEYVELI LIGNITE CORPORATION LIMITED(NLC LTD)

A. Govindarajan (1) R. Thamilselvan (2) V. Balachandran (3)

(1) Research Scholar, Sathyabama Institute of Science and Technology (Deemed to be University), Chennai, Tamil Nadu, India.
(2) Research Supervisor, Assistant Professor Department of management studies, Sathyabama Institute of Science and Technology (Deemed to be University), Chennai, Tamil Nadu, India.
(3) Professor of Corporate Secreteryship, Alagappa University, Karaikudi, India.

Manuscript ID:- 00000-53218
Access Type : Open Access
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Cite this article:A. Govindarajan,R. Thamilselvan,V. Balachandran,  Solvency Analysis On Public Sector Undertaking: A Case Study On Neyveli Lignite Corporation Limited(nlc Ltd), International Journal of Management(IJM), 2012, 3(1), PP.149-159

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Abstract

Solvency is the overall stability of a business enterprise. Solvency can be determined in short term as well long term period. Solvency ratio measured in short term is known as liquidity and in the long term is known as stability. Short term solvency ratio can be classified into current ratio, quick ratio and acid test ratio, whereas the long term solvency was measured using Debt equity ratio, Proprietary ratio, Fixed Assets ratio, Capital gearing ratio, Debt service coverage ratio and Solvency ratio. The objective of this study was to examine the solvency position of a sample company and testing the significance of correlation .To assess the critical factors which affect the solvency of Neyveli lignite Corporation Limited (NLC Ltd) and to provide useful suggestions for the betterment of future solvency on the basis of findings of the study. The study has been conducted by selecting a few important parameters such as Assets, Liquid assets, Absolute liquid assets, Debt, Equity, Fixed interest or dividend bearing funds, Tangible assets, Outsiders Liabilities. For making the analysis of solvency position of NLC Ltd, ratio analysis a techniques of Financial Management have been used. For assessing the behavior of above ratios, Statistical techniques have been used i.e. Arithmetic Mean, Standard Deviation, Coefficient of Correlation and Student t-test. Through the observations of this study, it is found that the short and long term solvency position of NLC Ltd is satisfactory. The company can improve their performance by utilizing the increased current assets. The long term solvency shows under-utilized outside sources, as it is in low levered position. The company can mobilize outsiders fund to show a better performance
Author Keywords
Current Assets Liquid assets Absolute liquid assets Debt Equity Fixed interest or dividend bearing funds Tangible assets Outsiders Liabilities
Index Keywords
Working capital Solvency Bankruptcy


ISSN Print: 0976-6367 ISSN Online: 0976-6375
Source Type: Journals Document Type: Journal Article
Publication Language: English DOI:
Abbreviated Journal Title: IJM Access Type: Open Access
Publisher Name: IAEME Publication Resource Licence: CC BY-NC
Major Subject:Social Sciences and Humanities Subject Area classification: Business, Management and Accounting
Subject area: General Business, Management and Accounting Source: SCOPEDATABASE