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Research Paper | Accounting | India | Volume 9 Issue 3, March 2020 | Popularity: 6.9 / 10

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An Analytical Study on Measuring Short Term Solvency Position of Selected Indian FMCG Companies

Pankaj Sharma

Abstract: This study directed to know the short term creditworthiness of selected FMCG companies, and ability to get credit term and to meet short term obligations towards suppliers and other parties. To meet this objective and to know short terms solvency position of company, data were collected from annual reports and financial statements of respective company for the 5 accounting periods ranging from 2013-14 to 2017-18. The collected components were analyzed in excel sheet and current ratio, liquid ratio, and operating cash flow ratio has been calculated. To make data more meaningful and understandable mean, standard deviation, co-efficient of variance, cross-tabulation and charts were used. This study concludes that ITC is managing liquidity by having adequate and ideal current assets while Colgate and HUL are depending upon cash generated from operations of the business to meet short term obligations that indicates strong short term creditworthiness of all the selected companies; they can easily get the credit terms from their suppliers and short term loans from banking and financial institutions.

Keywords: Liquidity, Suppliers, Creditworthiness, FMCG, Position

Edition: Volume 9 Issue 3, March 2020

Pages: 1550 - 1553

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