An analysis of liquidity, profitability and risk

Abstract

The study is to analysis the effects of liquidity, profitability and risk of listed food, beverage and tobacco companies on Colombo Stock Exchange (CSE) in Sri Lanka. In this study purpose, six companies have been selected from CSE for six years period from 2006/2007 to 2011/2012. The following ratios were used as indicators such as current ratio and quick ratio for liquidity, Earnings per Share (EPS) and Return on Assets (ROA) for profitability and Degree of Combined Leverage (DCL) for combined risk. This study highlights that liquidity is insignificant impact on profitability