Thus Current Ratio = Current Assets ÷ Current Liabilities. As per standard current ratio of 2:1 is considered to be satisfactory which means that current assets are twice the current liabilities. If current assets are twice or more than twice the current liabilities it reveals that a firm will not find any difficulty to meet its current liabilities on time. On the other hand if current assets are less than twice the current liabilities it means that a firm may face difficulty to pay off its current liabilities whenever they become due. If current ratio is less than 2:1 it reflects lack of working capital and shortage of liquidity in a firm.
2. OBJECTIVES OF STUDY
. To find out the amount of current assets and current liabilities in Maruti Suzuki from 2010-11 to 2014-15.
. To find out the amount of current assets and current liabilities in Tata Motors from 2010-11 to 2014-15.
. To calculate and compare the current ratio of Maruti Suzuki and Tata Motors during 2010-2011 to 2014-15.
. To test whether there is a significant difference between current ratio of Maruti Suzuki and Tata Motors with the help of t test during 2010-11 to 2014-15.
3. RESEARCH METHODOLOGY
The study is primarily based on secondary data. The relevant information in this regard has been collected from various sources like articles, websites, journals,
textbooks, and annual reports of Maruti Suzuki and Tata Motors., The analysis is carried out through various statistical tools like percentage, average, t test etc.
4. ANALYSIS AND INTERPRETATION
In order to analyze short-term solvency of Maruti Suzuki and Tata Motors current ratio has been calculated and is explained with the help of table and graphical representation followed by a comparative analysis.
to be ccontinued….
SHORT TERM SOLVENCY ANALYSIS OF LEAD AUTOMOBILE PLAYERS IN INDIA PART 3
