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 Divis Laboratories Limited for the financial years 2021-22 to 2023-24. Divis Labs is a leading pharma company in India listed under the category of small caps segment in the Bombay Stock Exchange and National Stock exchange. The present case study provides scope to discuss the concept of liquidity analysis and the process of analyzing and interpreting a company's liquidity position 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 Divis Laboratories 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; Divis Laboratories Limited