Impact Of Liquidity Ratio

IMPACT OF LIQUIDITY RATIO ON ITES INDUSTRY

ITES ITES is defined as outsourcing of processes enabled with IT and covers diverse areas like Finance, HR, Administration, health care and telecommunication etc

ITES INCLUDES BPO Medical Transcription Animation Data Processing and Legal Databases Engineering and Design Geographic Information System Services Human Resource Services Revenue Accounting Back office operations Support Centers Web site services

Liquidity Ratios Liquidity ratio provide information about a firm’s ability to meet its current i.e., short term liabilities. The numerator of a liquidity ratio is part or all of current assets. The denominator of a liquidity ratio is the company's current liabilities, i.e., obligations that the company must meet soon, usually within one year.

Classification of Liquidity Ratios 

Current ratio: Current ratio = Current asset / Current Liabilities

 Quick ratio/ Liquid ratio/ Acid test ratio: Liquid ratio = (CA – Inventories – Prepaid exp.) / CL  Absolute liquid ratio: Absolute liquid ratio = Absolute liquid asset / CL  Net working capital ratio: NWCR = Working capital / Total asset

LIQUIDITY RATIO Current Ratio

=

1.81

Quick Ratio

=

1.77

Absolute Liquid Ratio

=

0.23

Net Working Capital Ratio

=

Impact of Liquidity Ratios On Creditors On Suppliers On Management On investor On Government On Credibility of Company On Customer

Conclusion High liquidity ratios are the indicator of sound and stable financial condition of a company Corporate Social Responsibilities (CSR) :  Society  Environment  Charity for Organizations like NGO