AIMA ICRC Present Workshop on Case Teaching & Writing (Hybrid Mode) | 08-10 December 2022       
Case Study

THE LIQUIDITY AND SOLVENCY DILEMMA – THE TALE OF TWO INDIAN CORPORATES

Dr. Nusrathunnisa, Assistant Professor, Alliance University
Liquidity mismatch, Skewed capital structure, Cause and effect dilemma, Cash-driven retail, Debt-laden real estate, working capital management

Abstract:

This case study examines the financial distress faced by two companies in two different sectors, Unitech in Real estate, and Vishal Retail in Retail space. It aims to understand the negative implications of unwise financial management either in terms of an unimaginative debt-ridden capital structure or aggressive expansion with the use of excess liquidity in the short term. An evaluation of both companies is carried out to highlight the cause and effect dilemma which forms the crux of the case study.

Learning Objective:


This case study is conceived and written with the following learning objectives:
1. To familiarize the students with the industry background of the two companies that are studied.
2. To examine in detail the causes and effects of high debt capital structure and bad liquidity management affecting one another.
3. To clearly bring out the financial implications long term solvency mismanagement and short term liquidity misuse by the chosen companies.
4. To raise and answer a few critical questions that may arise from the case study.

  • Pub Date:
    04 Aug 2021
  • Source:
    ICRC
  • Discipline:
    Financial Management
  • Product#:
    1617
  • Keywords:
    Liquidity mismatch, Skewed capital structure, Cause and effect dilemma, Cash-driven retail, Debt-laden real estate, working capital management
  • Length:
    Pdf : 11 page(s) ,

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