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Stream/Area:
-
Subject:
-
Paper ID:
IJSREM66271
Volume:
10 |
7 |
Jul 2026
Pages:
1-7
Publication Frequency:
Monthly (12 issues per year)
License:International Journal of Scientific Research in Engineering and Management follows the Creative Commons Attribution 4.0 (CC BY 4.0) License, allowing free use and distribution with proper attribution.
Department of Management Studies
Visvesvaraya Technological University – Belagavi, Center for Post Graduate Studies-Bangalore
Department of Management Studies
Visvesvaraya Technological University – Belagavi, Center for Post Graduate Studies-Bangalore
The current study titled “Financial Performance Analysis of ITC Limited: A Profitability and Liquidity Perspective” aims to assess the financial performance of ITC Limited by analyzing its profitability and liquidity position for the period 2020-21 to 2024-25. Financial statement analysis is an important tool for evaluating a company’s efficiency in operations, financial soundness and performance. The study is based solely on the secondary data collected from the published annual reports of ITC Ltd and other reliable sources. The study utilizes various financial analysis tools like profitability ratios (Net profit ratio, Operating profit ratio, Debt- Equity Ratio, Return on Equity and Asset Turnover ratio). Liquidity Ratios (Current ratio and Quick ratio).These tools were used to evaluate the financial performance, profitability, liquidity position, operational efficiency and financial stability of the company over the five years period. The net profit ratio and operating profit ratio were satisfactory in the study period. The liquidity position was sound as reflected by current ratio and quick ratio. High Debt-Equity ratio indicated strong financial stability. The conclusion of the study is that ITC Limited has been able to maintain healthy profitability, satisfactory liquidity, efficient utilization of assets and sound financial stability during the study period.The study also proves that the profitability and liquidity position of ITC Limited has improved considerably and hence the alternative hypothesis is accepted. The results of the study can assist investors, financial analysts, researchers, management and other stakeholders to assess the company’s financial performance and long-term sustainability.
KEYWORDS
The present study analyzed the profitability and liquidity performance of ITC Ltd for the financial years 2020–21 to 2024–25 using various financial ratios. The Net Profit Ratio ranged from 25.48% to 29.87%, indicating consistent profitability throughout the study period. The Operating Profit Ratio remained strong between 32.04% and 35.24%, reflecting efficient operational performance. The Return on Equity improved from 22.09% in 2020–21 to 29.59% in 2024–25, demonstrating better utilization of shareholders' funds. The Current Ratio varied between 2.70 and 3.13, remaining above the standard 2:1, while the Quick Ratio ranged from 1.75 to 2.11, exceeding the ideal 1:1 benchmark and indicating sound liquidity management. The Debt–Equity Ratio remained extremely low, ranging from zero.00003 to 0.00010, displaying minimal dependence on external borrowings and a strong capital structure. Overall, the economic ratio evaluation shows that ITC Ltd maintained a healthy stability between profitability and liquidity, with stable financial performance, green aid usage, and low economic threat. Therefore, the study concludes that ITC Ltd is financially sound and well-positioned for sustainable long-term growth and value creation for its stakeholders.
1. Abha Gupta & Pratibha Kumari (2024) “Evaluating Retail Chain Profitability Insights from ITC”. NOLEGEIN- Journal of Operations Research & Management, ISSN: (print/OA details not listed), Vol. 8 Issue 1, pp. 1-15. 2. Saranya W (2024) “A Comparative study on financial statement analysis of Indian Tobacco Limited (ITC) and Hindustan Unilever Limited (HUL)”. 3. Dr Gayathiry D & Bhuvaneshwari V (2026) “A Data-Driven financial performance evaluation of ITC Ltd using Ratio Analysis” International journal of Advanced Multidisplinary Research and Educational Development Volume 2, Issue 1. 4. www.itcportal.com 5. https://itcportal.com/content/dam/itc-corporate/pdfs/report-and-accounts/ITC-Report-and-Accounts-2025.pdf
Publication Date
7/21/2026
Peer Review Type
Double-Blind Peer Review
Review Rounds: 2
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