IDEAS home Printed from https://ideas.repec.org/a/gam/jmathe/v9y2021i18p2231-d633352.html
   My bibliography  Save this article

The Influence of Liquidity and Solvency on Performance within the Healthcare Industry: Evidence from Publicly Listed Companies

Author

Listed:
  • Larissa Batrancea

    (Faculty of Business, Babes-Bolyai University, 7 Horea Street, 400174 Cluj-Napoca, Romania)

Abstract

Any lucrative economic activity implies aiming at obtaining a profit, including companies in the healthcare industry. The present study analyzes the extent to which financial liquidity and financial solvency influenced the performance of 34 healthcare companies that are publicly traded on the New York Stock Exchange. The period of analysis spanned from Q4 2005 to Q4 2020. The research methodology favored a complex approach by running econometric models with two-stage least squares (2SLS) panel and panel generalized method of moments (GMM). Empirical evidence showed that the financial indicators current liquidity ratio, quick liquidity ratio, and debt to equity ratio significantly influenced company performance measured by return on assets, gross margin ratio, operating margin ratio, earnings before interest, tax, depreciation, and amortization. Strategies intended to improve business performance based on liquidity and solvency insights are also addressed.

Suggested Citation

  • Larissa Batrancea, 2021. "The Influence of Liquidity and Solvency on Performance within the Healthcare Industry: Evidence from Publicly Listed Companies," Mathematics, MDPI, vol. 9(18), pages 1-15, September.
    • Handle: RePEc:gam:jmathe:v:9:y:2021:i:18:p:2231-:d:633352
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7390/9/18/2231/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7390/9/18/2231/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Anca Nichita & Larissa Batrancea & Ciprian Marcel Pop & Ioan Batrancea & Ioan Dan Morar & Ema Masca & Ana Maria Roux-Cesar & Denis Forte & Henrique Formigoni & Adilson Aderito da Silva, 2019. "We Learn Not for School but for Life: Empirical Evidence of the Impact of Tax Literacy on Tax Compliance," Eastern European Economics, Taylor & Francis Journals, vol. 57(5), pages 397-429, September.
    2. André Luiz de Souza Guimarães & Valcemiro Nossa, 2010. "Working capital, profitability, liquidity and solvency of healthcare insurance companies," Brazilian Business Review, Fucape Business School, vol. 7(2), pages 37-59, May.
    3. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhi Li & Saijiao Zhou & Zuo Zhang, 2023. "The Location Choice and Survival of Polluting Firms under Environmental Regulation in Urban Agglomerations of China," Sustainability, MDPI, vol. 15(18), pages 1-20, September.
    2. Dominika Gajdosikova & Katarina Valaskova & Tomas Kliestik & Veronika Machova, 2022. "COVID-19 Pandemic and Its Impact on Challenges in the Construction Sector: A Case Study of Slovak Enterprises," Mathematics, MDPI, vol. 10(17), pages 1-20, September.
    3. Peter Brusov & Tatiana Filatova & Natali Orekhova, 2023. "The Generalization of the Brusov–Filatova–Orekhova Theory for the Case of Payments of Tax on Profit with Arbitrary Frequency," Springer Books, in: The Brusov–Filatova–Orekhova Theory of Capital Structure, chapter 0, pages 217-239, Springer.
    4. Andre Amaral & Taysir E. Dyhoum & Hussein A. Abdou & Hassan M. Aljohani, 2022. "Modeling for the Relationship between Monetary Policy and GDP in the USA Using Statistical Methods," Mathematics, MDPI, vol. 10(21), pages 1-20, November.
    5. Darya Dancaková & Jakub Sopko & Jozef Glova & Alena Andrejovská, 2022. "The Impact of Intangible Assets on the Market Value of Companies: Cross-Sector Evidence," Mathematics, MDPI, vol. 10(20), pages 1-14, October.
    6. Alfonsina Iona & Andrea Calef & Ifigenia Georgiou, 2023. "Credit Market Freedom and Corporate Decisions," Mathematics, MDPI, vol. 11(7), pages 1-13, March.
    7. Dong-Her Shih & Ting-Wei Wu & Po-Yuan Shih & Nai-An Lu & Ming-Hung Shih, 2022. "A Framework of Global Credit-Scoring Modeling Using Outlier Detection and Machine Learning in a P2P Lending Platform," Mathematics, MDPI, vol. 10(13), pages 1-13, June.
    8. Rolando Rubilar-Torrealba & Karime Chahuán-Jiménez & Hanns de la Fuente-Mella, 2023. "A Stochastic Analysis of the Effect of Trading Parameters on the Stability of the Financial Markets Using a Bayesian Approach," Mathematics, MDPI, vol. 11(11), pages 1-14, May.
    9. Dominika Gajdosikova & Katarina Valaskova & Tomas Kliestik & Maria Kovacova, 2023. "Research on Corporate Indebtedness Determinants: A Case Study of Visegrad Group Countries," Mathematics, MDPI, vol. 11(2), pages 1-30, January.
    10. Lanzhuang Xu & Hu Xue & Qianrong Wu, 2022. "The Impact of Development Zones on Economic Growth in Less Developed Regions: Evidence from Guangxi, China," Land, MDPI, vol. 11(10), pages 1-20, September.
    11. Peter Brusov & Tatiana Filatova & Natali Orekhova, 2023. "Influence of Method and Frequency of Profit Tax Payments on Company Financial Indicators," Springer Books, in: The Brusov–Filatova–Orekhova Theory of Capital Structure, chapter 0, pages 241-264, Springer.
    12. Peter Brusov & Tatiana Filatova & Natali Orekhova, 2023. "Benefits of Advance Payments of Tax on Profit: Consideration Within Brusov–Filatova–Orekhova (BFO) Theory," Springer Books, in: The Brusov–Filatova–Orekhova Theory of Capital Structure, chapter 0, pages 205-216, Springer.
    13. Chao Liu & Jiaye Lu & Ding Li & Mengyao Jia & Kunru Han, 2023. "Are State-Owned Enterprises Really Ineffective? An Empirical Study Based on Stochastic Frontier Analysis," Mathematics, MDPI, vol. 11(3), pages 1-22, January.
    14. Mehmet Ali Balcı & Larissa M. Batrancea & Ömer Akgüller & Anca Nichita, 2022. "Coarse Graining on Financial Correlation Networks," Mathematics, MDPI, vol. 10(12), pages 1-16, June.
    15. Weng Hoe Lam & Weng Siew Lam & Kah Fai Liew & Pei Fun Lee, 2023. "Decision Analysis on the Financial Performance of Companies Using Integrated Entropy-Fuzzy TOPSIS Model," Mathematics, MDPI, vol. 11(2), pages 1-18, January.
    16. Yasmeen Idilbi-Bayaa & Mahmoud Qadan, 2022. "Tell Me Why I Do Not Like Mondays," Mathematics, MDPI, vol. 10(11), pages 1-22, May.
    17. Mehmet Ali Balcı & Larissa M. Batrancea & Ömer Akgüller & Lucian Gaban & Mircea-Iosif Rus & Horia Tulai, 2022. "Fractality of Borsa Istanbul during the COVID-19 Pandemic," Mathematics, MDPI, vol. 10(14), pages 1-33, July.
    18. Jingjing Liu & Jing Wang & Tianlin Zhai & Zehui Li, 2022. "The Response of Ecologically Functional Land to Changes in Urban Economic Growth and Transportation Construction in China," IJERPH, MDPI, vol. 19(21), pages 1-17, November.
    19. Samuka Mohanty & Rajashree Dash, 2023. "A New Dual Normalization for Enhancing the Bitcoin Pricing Capability of an Optimized Low Complexity Neural Net with TOPSIS Evaluation," Mathematics, MDPI, vol. 11(5), pages 1-28, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Larissa M. Batrancea, 2021. "An Econometric Approach on Performance, Assets, and Liabilities in a Sample of Banks from Europe, Israel, United States of America, and Canada," Mathematics, MDPI, vol. 9(24), pages 1-22, December.
    2. Daniel Ştefan Armeanu & Georgeta Vintilă & Ştefan Cristian Gherghina, 2017. "Empirical Study towards the Drivers of Sustainable Economic Growth in EU-28 Countries," Sustainability, MDPI, vol. 10(1), pages 1-22, December.
    3. Youngho Kang & Byung-Yeon Kim, 2018. "Immigration and economic growth: do origin and destination matter?," Applied Economics, Taylor & Francis Journals, vol. 50(46), pages 4968-4984, October.
    4. Alcaraz, Carlo & Villalvazo, Sergio, 2017. "The effect of natural gas shortages on the Mexican economy," Energy Economics, Elsevier, vol. 66(C), pages 147-153.
    5. Khalil, Umair, 2017. "Do more guns lead to more crime? Understanding the role of illegal firearms," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 342-361.
    6. Thorsten Lehnert, 2019. "Asset pricing implications of good governance," PLOS ONE, Public Library of Science, vol. 14(4), pages 1-14, April.
    7. Cho, Seo-young & Vadlamannati, Krishna Chaitanya, 2010. "Compliance for big brothers: An empirical analysis on the impact of the anti-trafficking protocol," University of Göttingen Working Papers in Economics 118, University of Goettingen, Department of Economics.
    8. Katsushi S. Imai & Raghav Gaiha & Ganesh Thapa & Samuel Kobina Annim, 2013. "Financial Crisis In Asia: Its Genesis, Severity And Impact On Poverty And Hunger," Journal of International Development, John Wiley & Sons, Ltd., vol. 25(8), pages 1105-1116, November.
    9. Marco Botta & Luca Colombo, 2016. "Macroeconomic and Institutional Determinants of Capital Structure Decisions," DISCE - Working Papers del Dipartimento di Economia e Finanza def038, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    10. International Monetary Fund, 2016. "Republic of Poland: Selected Issues," IMF Staff Country Reports 2016/211, International Monetary Fund.
    11. Arturas Juodis, 2013. "Cointegration Testing in Panel VAR Models Under Partial Identification and Spatial Dependence," UvA-Econometrics Working Papers 13-08, Universiteit van Amsterdam, Dept. of Econometrics.
    12. Díez-Esteban, José María & Farinha, Jorge Bento & García-Gómez, Conrado Diego, 2016. "The role of institutional investors in propagating the 2007 financial crisis in Southern Europe," Research in International Business and Finance, Elsevier, vol. 38(C), pages 439-454.
    13. Vieira, Flávio & MacDonald, Ronald & Damasceno, Aderbal, 2012. "The role of institutions in cross-section income and panel data growth models: A deeper investigation on the weakness and proliferation of instruments," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 127-140.
    14. Nam, Changwoo, 2016. "Impact of Corporate Tax Cuts on Corporate Investment," KDI Policy Forum 264, Korea Development Institute (KDI).
    15. Alfonso Mendoza-Velázquez & Luis Carlos Ortuño-Barba & Luis David Conde-Cortés, 2022. "Corporate governance and firm performance in hybrid model countries," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 21(1), pages 32-58, February.
    16. repec:hal:spmain:info:hdl:2441/dambferfb7dfprc9m052g20qh is not listed on IDEAS
    17. Hakkala, Katariina & Heyman, Fredrik & Sjöholm, Fredrik, 2007. "Cross-Border Acquisitions, Multinationals and Wage Elasticities," Working Paper Series 709, Research Institute of Industrial Economics.
    18. Ensar Yılmaz & Zeynep Kaplan, 2022. "Heterogeneity of market power: firm-level evidence," Economic Change and Restructuring, Springer, vol. 55(2), pages 1207-1228, May.
    19. Ilona Babenko & Benjamin Bennett & John M Bizjak & Jeffrey L Coles & Jason J Sandvik, 2023. "Clawback Provisions and Firm Risk," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 12(2), pages 191-239.
    20. Leopoldo Fergusson & Carlos Molina, 2020. "Facebook Causes Protests," HiCN Working Papers 323, Households in Conflict Network.
    21. Tuba DERYA-BASKAN & Eda BALIKÇIOĞLU, 2018. "Firma Bileşenlerinin Halka Açık Perakende Firmalarında Kurumlar Vergisine Etkisi," Sosyoekonomi Journal, Sosyoekonomi Society, issue 26(37).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jmathe:v:9:y:2021:i:18:p:2231-:d:633352. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.