PROFITABILITY RATIOS TO PREDICT LONGTERM SOLVENCY: AN ANALYTICAL STUDY

Finance is the backbone of a business, required from its inception to its closure or liquidation. It has a profound impact on a company's profitability, affecting its overall performance and long-term viability. the study focuses on turning unstructured information into actionable intelligence, which drives strategic decisions that propel the firm forward.The objective of this study is to analyse the effectiveness of profitability ratios in predicting the long-term solvency of businesses. Data was collected over three months and covered the period from 2019 to 2023. Key financial ratios, including the net profit ratio, return on total assets, return on investment, return on shareholders' funds, gross profit and operating profit were used to evaluate the company’s performance.The study has demonstrated commendable strengths in inventory management and profitability, recent trends in liquidity, debt management, and receivables collection indicate several areas requiring focused improvement.