A Study on Financial Performance Analysis of the Lakshmi Mills Company Limited Coimbatore
Mr. J. Jerlin Rakshan 1, Mrs. P. Gopika2
1Student, Department of Management Studies, Karpagam College of Engineering, Coimbatore, Tamil Nadu
2Assistant Professor, Department of Management Studies, Karpagam College of Engineering, Coimbatore, Tamil Nadu
ABSTRACT
Assessing a company's economic viability through its published financial statements forms the backbone of financial performance evaluation. This paper examines the fiscal health of The Lakshmi Mills Company Limited, Coimbatore, one of the country's longest-standing textile producers, incorporated as early as 1910. The investigation covers five consecutive accounting years from 2020-21 through 2024-25, drawing exclusively on data disclosed in the company's audited annual reports. Analytical techniques applied include ratio analysis, directional trend measurement, and Pearson correlation assessment. Parameters examined span short-term payment capacity (current, quick, and absolute liquidity ratios), long-term capital structure (debt-equity, proprietary, and fixed assets ratios), operational effectiveness (inventory, receivables, and working capital turnover), and earnings performance (return on equity). Key observations indicate that although the firm sustained acceptable near-term solvency across all five years, the position has gradually weakened. External borrowing remained minimal relative to owned capital, reflecting a cautious debt policy. Nonetheless, returns generated for shareholders and debtor collection speed deteriorated noticeably over the review window, signalling areas warranting strategic attention. Trend figures confirm expansion in both asset and liability bases, while the weak stock-cash correlation (r = 0.11) suggests these two liquidity components operate largely independently.
Keywords: Fiscal Health Assessment, Ratio Analysis, Lakshmi Mills, Cotton Textile Sector, Working Capital Management, Short-Term Solvency, Capital Structure
