A Pragmatic Analysis of influence of Liquidity and Leverage on the Profitability of Selected Gems and Jewellery Companies in India

Abstract

The gems and jewellery sector is a significant contributor to the Indian economy, serving as a leading foreign exchange earner for the country. A critical issue in this sector involves determining the optimal combination of liquidity and leverage variables to enhance a firm's financial performance. This study aims to analyze the impact of liquidity and leverage on the profitability of selected gems and jewellery companies in India.

Covering the period from 2010-11 to 2019-20, the research employs multiple linear regression to test the hypotheses. Despite the comprehensive analysis, the study finds no significant impact of liquidity and leverage on the profitability of the selected sample units. This suggests that other factors might play a more crucial role in influencing profitability within the gems and jewellery sector during the examined period.