Acta Univ. Agric. Silvic. Mendelianae Brun. 2017, 65(6), 2095-2104 | DOI: 10.11118/actaun201765062095

The Effect of Selected Financial Indicators on Liquidity of Companies in Selected Sectors in the Czech Republic

Markéta Šeligová
Department of Finance and Accounting, School of Business Administration, Silesian University, Univerzitní nám. 1934/3, 733 40 Karviná, Czech Republic

The aim of this paper is to determine the effect of selected financial indicators related to the structure of funding sources on liquidity of companies in selected sectors in the Czech Republic from 2000 to 2015. With the purpose to fulfill the aim, we examine existence and character of relationship between selected financial factors related to the structure of funding sources (debt equity ratio, return on equity, share of fixed assets to total assets, share of earnings before interest and taxes to total assets) and liquidity of the companies in sectors such as mining and quarrying, manufacturing, construction, service sector and energy sector. The existence of relationship between financial indicators related to the structure of funding sources and liquidity of companies is tested by correlation analysis and regression analysis. The results show that there is the negative impact of share of fixed assets to total assets on liquidity of companies in service sector in the Czech Republic. The liquidity of companies was positively influenced by the return on equity and negatively influenced by debt equity ratio in energy sector in the Czech Republic.

Keywords: correlation, debt equity ratio, fixed assets, leverage ratio, liquidity of companies, regression analysis, return on equity
Grants and funding:

"This paper was supported by the Ministry of Education, Youth and Sports Czech Republic within the Institutional Support for Long-term Development of a Research Organization in 2017".

Published: December 7, 2017  Show citation

ACS AIP APA ASA Harvard Chicago IEEE ISO690 MLA NLM Turabian Vancouver
Šeligová, M. (2017). The Effect of Selected Financial Indicators on Liquidity of Companies in Selected Sectors in the Czech Republic. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 65(6), 2095-2104. doi: 10.11118/actaun201765062095
Share...
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. ANDERSON, R. W. 2002. Capital structure, firm liquidity and growth. Working paper research No. 27. National Bank of Belgium. [Online]. Available at: www.nbb.be/doc/ts/publications/wp/wp27en.pdf [Accessed: 2017, January 1].
    2. DE JONG, A., KABIR, R. and NGUYEN T. T. 2008. Capital structure around the world: the roles of firm and country-specific determinants. Journal of Banking and Fnance, 32(9): 1954-1969. DOI: 10.1016/j.jbankfin.2007.12.034 Go to original source...
    3. LIPSON, M. L. and MORTAL, S. 2009. Liquidity and capital structure. Journal of Financial Markets. 12(4): 611 -644. DOI: 10.1016/j.finmar.2009.04.002 Go to original source...
    4. MEHAR, A. 2005. Impacts of equity financing on liquidity position of a firm. Applied Financial Economics, 15(6): 425-438. DOI: 10.1080/0960310042000314197 Go to original source...
    5. MILOŞ, M. C. 2015. Capital Structure Determinants. Evidence from the Romanian Listed Companies. Analele Universitatii 'Eftimie Murgu' Resita. Fascicola II. Studii Economice, 21: 129-134.
    6. MYERS, S. C. 2001. Capital structure. The Journal of Economic Perspectives, 15(2): 81-102. DOI: 10.1257/jep.15.2.81 Go to original source...
    7. RŮČKOVÁ, P. 2015. Impact of Liquidity and Profitability on Use of Debt Finance Sources of Companies in Manufacturing Industry in V4 Countries. Acta Academica Karviniensia, 15(3): 69-79. Go to original source...
    8. SALEEM, Q. and REHMAN, R. U. 2011. Impacts of liquidity ratios on profitability. Interdisciplinary Journal of Research in Business, 1(7): 95-98.
    9. SHAH, P. 2012. Evaluation of Profitability and Liquidity Relationship through Multivariate Working Capital Analysis. A Management Journal, 3(2):177-198.
    10. SCHLEIFER, A. and VISHNY, R. W. 2001. Stock Market Driven Acquisitions. SSRN's eLibrary. [Online]. Available at: papers.ssrn.com/sol3/papers.cfm?abstract_id=278563 [Accessed: 28 February 2017]. Go to original source...
    11. STULZ, R. 1990. Managerial discretion and optimal financing policies. Journal of financial Economics, 26(1): 3-27. DOI: 10.1016/0304-405X(90)90011-N Go to original source...
    12. ŠARLIJA, N. and HARC, M. 2012. The impact of liquidity on the capital structure: a case study of Croatian firms, Business Systems Research, 3(1): 30-36. Go to original source...
    13. TRIPPNER, P. 2013. Analysis of Financial Liquidity Management in the Enterprise and its Impact on the Profitability. In: Proceedings of 15th International Conference on Finance & Banking. Department of Finance, Silesian University in Opava, School of Business Administration in Karviná, pp. 494-501.
    14. WILLIAMSON, O. E. 1988. Corporate Finance and Corporate Governance. Journal of Finance, 43(3): 567-591. DOI: 10.1111/j.1540-6261.1988.tb04592.x Go to original source...

    This is an open access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY NC ND 4.0), which permits non-comercial use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content