ABSTRACT

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The finance in the company determines the efficiency of the management in all aspects. Purchase of materials for the production from the suppliers applicable to our inventory policy and of new machines to manage the recent objectives set by the management to overcome the previous problems faced by the management, allotment of assured level of earnings for any other specific or unexpected fluctuation in the price level, expansion of capital structure according to the environment of the capital market, recruitment of employees to assign the work and to take part in the managerial tasks, maintenance of regular course of actions are relating to the position of the company to arrange the required finance. The company has to maintain proper relationship with the parties connecting with it to be efficient to solve all the difficulties. The solvency of the company is based on its financial structure and liquidness of the assets according to pay off its debts. Hence this article is presented to view on the solvency and liquidity position. Ratio analysis in particularly solvency and liquidity ratios and trend analyses are worked out and statistical tools such as Altman Z-Score are also used to determine the bankruptcy condition of the company.