An Analysis of the Financial Strength of Steel Industry in India

Abstract

The present paper examines the Financial Strength of the identified units in the steel industry in India in terms of short-term solvency and long-term solvency. Companies are selected for the study from the ‘A group of steel companies’ listed in the stock exchanges in India. Data have been collected for a period of ten years ranging from 2003-04 to 2012-2013. The important variables used in the study includescurrent ratio, quick ratio, absolute liquid ratio, debt-equity ratio, total assets to debts ratio, long-term debt to net working capital, proprietary ratio, fixed assets to net worth ratio, and interest coverage ratio. To evaluate the impact of these selected variables on the Financial Strength of the steel industry, ANOVA-Test is used.