Key Indicators of Corporate Financial Status: Empirical Evidence from Indian Industrial Sector

ABSTRACT

The present pandemic situation has led to the rise in the number of financially distressed companies in the Indian business ecosystem. Stakeholders, especially shareholders, unsecured and trade creditors who do not enjoy lien on company assets, should be extra cautious about the financial status of a company before making any investment or lending decision. The present study attempts to suggest the key indicators of corporate financial status after analysing 12 ratios from the financial statements of 162 sample companies for five financial years. The suggested key indicators can assist the shareholders and creditors in differentiating a financially distressed company from a financially sound company in the Indian industrial sector.