2025, Vol. 8, Issue 1

author(s)
Shivani Chhabra and Shweta Gupta

abstract
This study examines the relationship between liquidity and profitability in the Indian pharmaceutical industry, focusing on the top five NSE-listed firms by market capitalization from 2015 to 2024. Using secondary data from the Prowess database, it applies panel regression and correlation analyses. Liquidity is measured by the current ratio (CR) and quick ratio (QR), while profitability is assessed using return on assets (ROA) and return on equity (ROE), with firm size as a control variable. Findings show that QR positively and significantly influences both ROA and ROE. In contrast, CR does not significantly impact ROA and is negatively related to ROE. Firm size also negatively affects profitability. The study emphasizes the need for effective liquidity management to ensure long-term profitability.