Evaluating The Short-Term Solvency Of ICICI Prudential And ICICI Lombard

Abstract

This study analyses ICICI Prudential and its metrics along with the same for about five years (2018–2022) which would help us ascertain its short-term solvency. The current ratio - comparing current assets to short-term debt (current liabilities) - is often considered an indicator of a company's generally better-than-average fiscal viability because it reflects the name promise. Our analysis suggests that ICICI Prudential has a solvency ratio that is both higher and more stable than that of its competitors, indicating better short-term financial performance. Results from t-test: This metric was able to differentiate between the current ratios of both companies with a high significance in quantifying financial stability. While ICICI Lombard has lower and more volatile current metrics, the larger liquidity position of ICICI Prudential suggests better short-term financial management. It underscores the urgent necessity of enhanced asset-liability management. The outcome also inferred stakeholders' need to consider the current ratio, as it is a fundamental indicator of financial performance and can predict whether or not an entity has sustainable working capital.