A COMPARATIVE STUDY OF FINANCIAL PERFORMANCE ANALYSIS WITH SPECIAL REFERENCE TO SELECTED SOFTWARE COMPANIES IN INDIA

Abstract

Finance is the lifeblood of any organization. Performance of any organization is depend on various ratios such as liquidity solvency and profitability ratios. Liquidity and solvency play an important role in the successful functioning of every business firm. Liquidity helps to understand the availability of cash in a company which determines the short term financial position of the company while the solvency ratio indicates whether a company's cash flow is sufficient to fulfill its long term liabilities. The liquidity and profitability of a company are directly related to working capital. Companies that maintain higher liquidity are considered to be at lower risk and companies that maintain lower liquidity are considered to be at higher risk. The liquidity and solvency ratios is used to judge the ability of a firm to meet its short and long term maturing obligation.