An Analytical Study of Liquidity and Asset Management Ratio of selected Textile Industry Companies in India

The textile industry is one of the oldest and most significant sectors in India, contributing substantially to employment, exports, and industrial output. Effective liquidity and asset management are critical for ensuring operational efficiency, financial stability, and long-term sustainability in this highly competitive and working-capital-intensive industry. The present study aims to analyse the liquidity position and asset management efficiency of selected textile companies in India using financial ratios and statistical tools. The study is based on secondary data collected from annual reports of selected textile companies for a period of ten years. Key liquidity ratios such as current ratio, quick ratio, and cash ratio, along with asset management ratios like inventory turnover ratio, total asset turnover ratio, and fixed asset turnover ratio, are used for analysis. Statistical tools such as mean, standard deviation, and ANOVA are applied to examine variations among companies. The findings reveal that textile companies maintain moderate liquidity positions, with significant investment in inventories and receivables. While some firms demonstrate efficient asset utilization, others face challenges due to high working capital requirements and fluctuating demand. The study highlights that efficient liquidity and asset management directly influence financial performance and operational efficiency. The research concludes that textile firms must adopt better working capital policies, improve receivables management, and optimize asset utilization to enhance profitability and sustainability. The study provides useful insights for investors, policymakers, and management for strategic decision-making.