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Erschienen in:
2019 | OriginalPaper | Buchkapitel
Impact of the Size of Equity on Corporate Liquidity
verfasst von : Sebastian Klaudiusz Tomczak
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Abstract
In the market economy correct determination of the financial structure is immensely important. The right equity form can contribute to its competitive edge, whereas the improper one may lead up to many problems, among other things, the loss of corporate ability to pay off its financial obligations.
This paper covered the analysis of fifteen thousand manufacturing companies, among them the ones, marked by high quantities of equity in the total assets, have been selected along with intervals of values. Next, the analysis of financial liquidity has been carried out within the group in question – the most typical indicators of liquidity have been computed. Namely, current ratio, quick ratio, cash ratio, size of working capital I and II ratio.
The comparative analysis of the indicator of the size of equity with the indicators of liquidity makes it possible to answer the question: Are the companies having a high share of equity in the total assets marked by overliquidity? ANOVA test has been applied to analyse the influence of the size of equity on the corporate liquidity. Based on the results of the test, there is a significant impact on the value of liquidity ratios of manufacturing companies. The companies having a high share of equity in the total assets were marked by overliquidity. In addition, the standard values for liquidity ratios were calculated.