Liquidity Performance of Bharath Petroleum Corporation Limited

Abstract

The Petroleum Industry involves the refining of crude petroleum and the processing of Natural Gas into a multitude of products, as well as the distribution and marketing of petroleum-derived products India has recently become the sixth largest consumer of oil and gas, with its oil consumption recording a compounded annual growth of 9.1 percent per annum. The objective of the present study is to analyze the Liquidity and Leverage performance of the Bharat Petroleum Corporation Limited and the Reliance Industries Limited. The present study attempts to analysis the performance of liquidity and leverage position of the BPCL and the RIL during the period 2006-07 and 2010-11.Liquidity is the company's ability to convert non cash assets into cash or to obtain cash in order to meet current liabilities. Liquidity applies to the short term, which is typically viewed as a time span of one year or less. The liquidity position of the BPCL can be further improved to increase the productivity with a view to meet the increased demand. The ability of the BPCL meet their financial obligations is more than standard norms. The management as the BPCL may take necessary steps to invest their funds in short term securities to strike a proper balance between high liquidity and low liquidity.