Wroclaw University of Economics Financial consequences linked with investments in current assets: Polish firms case Grzegorz Michalski Wroclaw University of Economics 2019-04-23

Polish firms risk sensitivity grows in 2002-2010 and as a result we should expect growning levels of financial liquidity indicators like CURRAT, QUIRAT, CASRAT

Polish firms risk sensitivity grows in 2002-2010 and as a result we should expect growning levels of financial liquidity indicators like CURRAT, QUIRAT, CASRAT

Polish firms risk sensitivity grows in 2002-2010 and as a result we should expect growning levels of financial liquidity indicators like CURRAT, QUIRAT, CASRAT

That relation completely works in full operating cycle firms

CASE: for illustration was used data collected from 288 Polish beverage producers firms* the model with ROA (t) as dependable and with current ratio (t), liquidity ratio (t-1), collection period in days (t), current ratio (t-1) as its source is a result. *(data collected from Amadeus database)

Mean Standard deviation Numer of observations   Mean Standard deviation Numer of observations CA11 Current assets 2011 5152,278 20348,90 288 CA10 Current assets 2010 5628,582 21975,27 CSH11 Cash and equivalents 2011 767,704 4144,92 CSH10 Cash and equivalents 2010 749,649 3860,94 WC11 Working capital 2011 2626,574 13523,25 WC10 Working capital 2010 2221,850 8545,63 NCA11 Net Current assets 2011 -331,512 10543,26 NCA10 Net Current assets 2010 50,509 10609,25 COPE11 Collection period 2011 87,810 52,89 COPE10 Collection period 2010 82,052 36,02 CUR11 Current ratio 2011 61,398 48,69 CUR10 Current ratio 2010 56,895 49,27 LIRT11 Liquidity ratio 2011 61,191 48,94 LIRT10 Liquidity ratio 2010 57,587 49,39 WCpE11 Working capital per employee 2011 91,693 37,58 WCpE10 Working capital per employee 2010 89,560 95,30 ROA11 ROA 2011 62,186 48,72 Source: own calculation based on 288 Polish beverage producers firms (data collected from Zephyr and Amadeus database)

Source: own calculation based on 288 Polish beverage producers firms (data collected from Zephyr and Amadeus database)

[1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15] [16] [17] [1] CA11 1,00 0,87 0,55 0,35 0,82 0,54 -0,35 -0,36 -0,12 -0,13 -0,30 -0,24 0,05 0,04 -0,29 [2] CA10 0,42 0,53 0,74 0,70 -0,43 -0,28 -0,10 -0,23 0,14 -0,22 [3] CSH11 0,76 0,29 0,30 0,15 -0,04 -0,08 -0,19 -0,14 -0,15 -0,02 -0,20 [4] CSH10 0,17 0,50 0,11 0,33 -0,07 -0,06 -0,18 0,01 0,23 -0,11 [5] WC11 0,39 -0,17 0,07 [6] WC10 -0,01 0,28 -0,05 0,20 [7] NCA11 0,84 0,06 0,00 [8] NCA10 0,09 [9] COPE11 0,38 0,31 0,10 [10] COPE10 0,58 [11] CUR11 0,81 0,21 0,98 [12] CUR10 0,27 0,13 [13] LIRT11 [14] LIRT10 0,25 [15] WCpE11 [16] WCpE10 [17] ROA11 Source: own calculation based on 288 Polish beverage producers firms (data collected from Zephyr and Amadeus database)

  Beta std err beta B std err b t(283) P 3,131447 1,196985 2,61611 0,009371 CUR11 current ratio 2011 0,941593 0,020821 0,942084 0,020832 45,22280 0,000000 LIRT10 Liquidity ratio 2010 0,138513 0,057128 0,136623 0,056348 2,42462 0,015950 COPE11 Collection period 2011 -0,023446 0,012372 -0,021596 0,011396 -1,89503 0,059108 CUR10 current ratio 2010 -0,084580 0,055974 -0,083639 0,055351 -1,51107 0,131887 Using 2010-2011 data for 288 Polish firms producing beverages, we find that among liquidity strategy indicators, ROA using P/L before tax % 2011 depends on current ratio 2011, liquidity ratio 2010, collection period 2011 and current ratio 2010. R= 0,98033871; R^2= 0,96106399; Corrected R^2= 0,96051366; F(4,283)= 1746; p<0,0000 ; Std. error of estimation: 9,6812. Source: own calculation based on 288 Polish beverage producers firms (data collected from Zephyr and Amadeus database)