Impact of Liquidity Ratio on Profitability: An Empirical Study of Automobile Sector in Karachi

Abstract- This research paper has examined to tell about impact of liquidity ratio on company profitability that how can liquidity affect on profitability either negatively or positively. the liquidity ratio include current and quick ratio which measure the company's profitability or efficiency of return on assets and return on equity this research has been conducting on automobile sector of five companies in Karachi including Pak Suzuki, Nissan Ghandhara, Toyota, Honda atlas,and Hino Pak.The data has been collected from different sources like financial statements, links other sources and so on. Current and quick ratio are the financial tools to measure the liquidity position and profitability of the company that where company has stand to pay its short term debt or not and how company can increase their profit by making investment in different class and use effective strategy and policies to overcome negative results of liquidity problem.we apply different test to analyze the relationship between liquidity ratio and profitability to find out positive or negative impact on compan