Abstract

Two trainees from an investment bank, as a part of their training program, were planning to make a presentation on the liquidity position of Aarti Drugs Limited (ADL) for the financial years 2018-19 to 2020-21. ADL is a leading pharma company in India listed under the category of small caps segment in the Bombay Stock Exchange. The present case study provides scope to discuss the concept of liquidity analysis and process of analyzing and interpreting the liquidity position of a company using liquidity ratios.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• The concept of liquidity analysis
• The application of liquidity ratios
• The liquidity position of Aarti Drugs Limited
• The Cash Conversion Cycle (CCC) and its role in liquidity management

Keywords

Liquidity analysis; Short-term solvency; Current Assets; Current Liabilities; Liquidity Ratios; Current Ratio; Quick Ratio; Cash ratio; Aarti Drugs Limited