An Analysis of Financial Health of Paper and Pulp Manufacturing Industries in India

Abstract

Financial health is essential for maintaining liquidity, solvency and profitability of a business organization, irrespective of its size and nature of operations. The management of financial positions draws the close attention of finance managers as it involves frequent and dynamic decision-making to determine "the size of" current assets required for uninterrupted flow of activities of a business. There is no internationally accepted standard for financial ratio against which the results can be compared. Therefore, Edwin I Altman combined a number of accounting ratios (liquidity, leverage, activity and profitability) to form an index of the profitability, which are effective indicators of corporate performance predicting bankruptcy well over a year or two in advance. The analysis shows that the financial health of paper and pulp manufacturing industries in India from the year 2004-05 to 2013-2014.