Economics, Econometrics and Finance
5 years ago

High Liquidity in Public Sector Banks Linked to Lower Profits

Abhinav - national monthly refereed journal of research in commerce and management
AN IMPACT OF LIQUIDITY MANAGEMENT ON PROFITABILITY: A STUDY OF SELECTED PUBLIC SECTOR BANKS IN INDIA
Kishan Badiyani

Paper Summary

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The study looked at how liquidity affects profitability in certain public sector banks in India. They used two ratios to measure liquidity and two ratios to measure profitability. After analyzing the data, they found a strong negative relationship between liquidity and profitability. Specifically, the current ratio had a big impact on return on capital employed, while the quick ratio had a big impact on net profit margin.