Financial Liquidity Management During Crisis

Anna Ludwiczak, Maciej Czarnecki
European Research Studies Journal, Volume XXV, Special Issue 3, 232-244, 2022
DOI: 10.35808/ersj/3033

Abstract:

Purpose: The aim of the article is to verify a hypothesis stating that financial security of companies has been significantly violated in the scope of economic crisis caused by COVID-19 pandemics. It has been assumed that traditional indicators of financial liquidity have declined and establishing the scale of the phenomenon constitutes a scientific problem. Design/Methodology/Approach: The research has been conducted as exemplified by a given sector: consumer goods and retail trade on the basis of data adapted from EMIS database. The research has regarded years 2018-2021. Statistical characteristics of two features have been used: current ratio indicator and quick ratio indicator, determining the location, spread, asymmetry and flattening characteristics. The analysis constructed in such a multidimension way was to enable a proper verification of the hypothesis stated. Findings: The results of the research has not verified the research hypothesis positively: the companies of a given sector had not compounded, and even improved their financial security measured with the use of traditional liquidity indicators. Practical implications: The conducted research regarding the liquidity management in companies in a extraordinary time od crisis emphasizes the multifaceted nature and complexity of issues connected with financial security; simultaneously discussing the statement that the entrepreneurs’ concern over the extending period of uncertainty, lead them to a certain mobilization to secure from lack of liquidity and forced more awareness in the topic of liquidity. Originality/value: In the process of data analysis certain characteristic features were observed: the average indicators in the sector are much higher than middle indicators which indicates the need to have a closer look at average data. In a researched sector most of the enterprises does not achieve the results suggested for liquidity indicators.


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