Impact of liquidity on the performance of the Sugar Industry in Pakistan

Faisal Abbas, Um-e- Habiba

Abstract


The main purpose of this study is to analyze the impact of liquidity on the performance of sugar industry in Pakistan. The data were collected from the non financial companies’ analysis of the State of Bank in Pakistan for the period of six years covering 2006-2011. For the purpose of analysis we used very famous software called SPSS and we have used regression analysis for our study result purposes. According to the regression analysis the null hypothesis one is accepted because inventory is insignificant at 5% level of significance.  According to the regression analysis the null hypothesis two is rejected because cash is significant at 5% level of significance. The results also show that cash has positive relationship with profitability of the firms. According to the regression analysis the null hypothesis three is rejected because debtors are insignificant. According to results debtors have negative relationship with profitability. According to the regression analysis the null hypothesis four is rejected because creditors have significant at 5% level of significance. The results show that rest of the all the variables are highly significant according to the t and p value of variables where current assets, sales are positively affecting the profitability but current liabilities are negatively correlated with profitability. These results also indicate that this sector must focus on this issue that they must reduce current liabilities and increase the current assets and sales volume for the better results.

Key Words: Profitability, Current Assets, Current liabilities, Regression and Correlation


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ISSN : 2251-1547