[13] A STUDY ON LIQUIDITY MANAGEMENT AND EFFECT ON PROFITABILITY IN SUNRAJA OIL INDUSTRIES PVT LTD

CrossRef DOI: https://doi.org/10.56815/ijmrr.v5si1.2026.107-112

Authors

  • Dr. D Divya Assistant Professor, Department of MBA Sri Ramakrishna College of Arts & Science, Coimbatore, India.
  • Mr. DevNarayan R II MBA, Department of MBA, Sri Ramakrishna College of Arts & Science, Coimbatore, India.

Abstract

This study analyses the relationship between liquidity management and profitability at Sunraja Oil Industries Pvt. Ltd., a key regional player in India's competitive edible oil industry. Using an analytical research design based on financial data spanning 2020–2024, the study evaluates the company’s short-term solvency, operational efficiency, and capital management. The findings indicate that Sunraja has demonstrated inconsistent working capital management, with the Current Ratio frequently falling below the recommended industry benchmark of 2:1 during the study period. Specifically, liquidity pressure was noted in 2022 and 2024, attributed to rising trade payables, slower inventory turnover, and delayed customer receivables. A clear correlation was established: efficient working capital management directly correlates with improved profit margins, while weak liquidity control, driven by high raw material costs and slow receivable collections, inversely impacted the Net Profit Margin. Recommendations focus on implementing stricter credit control, utilizing modern inventory techniques (like EOQ/ABC analysis), and optimizing the payables strategy to improve cash conversion cycles and ensure sustained financial growth.

Keywords:

Liquidity Management, Profitability, Working Capital, Financial Ratios, Edible Oil Industry, Sunraja Oil Industries, Inventory Control, Receivables Management

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