1. Wroclaw University of Economics
Financial consequences linked with investments in current assets: Polish firms case
Grzegorz Michalski
Wroclaw University of Economics

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

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

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

6. That relation completely works in full operating cycle firms

7. 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)

8. 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)

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

10. [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)

11. 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 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, ; R^2= 0, ; Corrected R^2= 0, ; 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)