Financial resilience of consumer staples firms depends not only on profitability but also on the quality of the operating cash flows as well as prudent management of liquidity, leverage, and debt-servicing ability. The objective of this paper is to conduct a study on the level of financial resilience of consumer staples firms in India based on four measures of financial resilience sourced from Screener.in, including the cash conversion cycle (CCC), the debt-to-equity ratio, the interest coverage ratio, and the CFO/OP ratio. Based on descriptive statistics, coefficient of variation, ranking analysis, and Pearson and Spearman correlation analysis, the study observes considerable variations in terms of the working-capital management and debt-servicing ability of the companies analyzed, although the leverage level remains fairly low among all companies. A negative correlation exists between the leverage and the interest coverage ratios, and there is also a correlation between cash conversion and a short cash conversion cycle. While companies like Dodla Dairy, Hindustan Unilever, and Avanti Feeds exhibit relatively balanced levels of working capital, leverage, and cash realization, the smaller companies that operate in the processed food industry have poor cash-flow generation ability despite having low levels of leverage.
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