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- DOI 10.18231/j.jmra.84168.1758707490
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CrossMark
Cashflow growth and liquidity tribulations: evidence from public sector chemical companies in Kerala
- Author Details:
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Sunil Kumar K.K. *
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Renjith Mohan P.
Sunil Kumar K.K. *
Renjith Mohan P.
Cash flow problems and liquidity tribulations are closely related in financial distress situation. ‘Insufficient cash flows are the reasons for non-repayment of loan amount’. When a firm experience financial distress, news about cash flow become more dominant than future return. Financial distress is a situation where a company is not able to meet or face difficulty to pay off its financial obligations. According to RBI’s definition negative working capital, cash loss and negative networth are the factors influencing Financial Distresses. This research paper has attempted to device models for predicting probability of financial distresses among the PSUs working under the Chemical Sector in Kerala. In order to evaluate the ratios that can influence group status and quantify their connection, Multiple Logistic Regression analysis tool is administered. The results of this study put forward some forewarning of financial distress by establishing statistical relationships between account data of financially distressed and non-distressed stages. Financial ratios play a vital role in identifying the problems of financial distress.
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