Liquidity and Profitability analysis of the selected Stock Broking Companies

Finance is the nerve centre and lifeline of any economic activity and therefore present in every sphere of economic and business life. It plays an extremely crucial role in the continuity and growth of a business. Ratio analysis is one of the basic analysis for examining the financial position and performance of the selected stock broking companies. t-test is a statistical procedure used to examine the mean difference between the sample and the population mean. It can also help to examine the existence of the significant difference between the years of the selected ratios during the study period from 2005-06 to 2014-15. Indian security market has experienced significant growth over the years on the back of various economic reforms and liberalization of financial markets. However, in the wake of the global economic crisis, Indian stock markets remained passive. Global economic recovery, which started taking shape post the 2008 financial crisis, looked promising at one point but suffered a major setback in 2011. The increased role of financial intermediaries in recovering from the global financial market disorder has realigned the role of the broking industry in the financial sector. The financial performance analysis constitutes the approach to judge the effectiveness of the finance function of the institution. Financial analysis is the most useful technique which enables financial manager to take rational decisions from time to time, keeping in view the objectives of the company. It relies on the comparisons or relationships of the data that enhances the utility or the practical value of the accounting information. This analysis consists in applying various analytical tools and techniques to the financial data. Financial analysis provides for analyzing financial conditions and performance of a company. Financial statement analysis is the process of identifying the financial strengths and weakness of the firm by properly establishing relationships between the items of the balance sheet and the profit and loss account. It helps the analyst to make a quantitative judgement with regard to company‟s financial position and performance.