An empirical study on financial health of ashok leyland

Liquidity is playing major role to meet the short term obligations on time for the business. Automobile industry required large amount of investment. For getting this requirement creditworthiness and profitability of the company plays a crucial role in the process of decision making of the shareholders. This paper is making attempt to examine the liquidity, profitability of Ashok Leyland and financial health using Altman’s Z-score test. The study based on secondary data collected from annual report of Ashok Leyland during the period 2011-12 to 2015-16. The study reveals that the liquidity position of Ashok Leyland was below the traditional standard and profitability ratio shows a positive sign, but it varies frequently during the study period. There is a positive correlation between liquidity ratios and some profitability ratios, but NPR, EPS and RONW shows a negative sign. The calculated z – score values are showing healthy zone during the study period, but company must take proper measure to increase the performance using available resources.