THE STUDY ON CORPORATE LIQUIDITY ON AGRICULTURE COMPANIES IN

PAKISTAN.

Executive Summary.

Purpose of this research will be to find out the liquidity of the agriculture companies of
Pakistan and to collect data regarding the research study through financial reports of
companies. Methodology used for the research will be descriptive because financial reports
will be taken into the account of the companies active in agriculture industry. After that data
collected will be analyzed and the suggestion will be provided to the companies about the
liquidity pattern.

INTRODUCTION.

Liquidity and specially cash is the financial strength for the company. Like cash term finance
certificate and short term government bonds also considered highly liquid assets because it
can be easily converted into cash quickly without affecting the market price.

Aim of the Research

Aim of this research study would be to check out the awareness of investors towards capital
market with special reference to derivatives.

Objectives of the Research

The primary objectives for conducting the research will be following.

1) to find out that how much liquidity a company should have

2) to find out that what are the determinants of liquidity and what happens if the firm has
low or high liquidity.

METHODOLOGY AND DESIGN:

This section consists of methodology use to conduct the research through proper channel.
Following Methods and design will be applied on the research.

Research Method
The method uses for the research will be descriptive because financial reports will be taken
into accounts of the companies active in agriculture industry

Purpose

Main theme of this research will be to find out the liquidity of the companies in the
agriculture industry

Time Horizon

Cross sectional study will be used for conducting the research, because data will be collected
at the time series in one flow.

Data Collection Method

As said above that descriptive method will be used as a tool to analyze the financial reports of
fertilizer companies

Timeline

Following table contains the time duration that will be consumed for the project work.

Thesis Work Duration

Research Proposal 2 Weeks
Literature review 2 Weeks
Data Collection 2-3 Weeks
Analysis 2 Weeks
Project Writing 3-4 Weeks

DATA ANALYSIS:

There is two main ways to measure the corporate liquidity. One of it is through current ratio
other is net working capital. Through the current ratio we can measure liquidity by Ratio
including the, acid test debt to equity ratio and current ratio.

CONCLUSION:

There are both benefits and consequences of hold the cash. The company have to pay the
transaction cost and some other cost with holding the cash or liquid assets but on the other
side the benefits of liquidity is the companies can build up the confidence in investors an
other stake holders so it can easily access to the external debt on low cost.