IDEAS home Printed from
   My bibliography  Save this article

Dynamic and Static Evaluation of Financial Liquidity in Family Farms


  • Joanna Berezhnitska

    () (Warsaw University of Life Sciences)


The research exposes the possibility of assessing liquidity in family farms. The purpose of the research is to check whether dynamic and classic (static) approaches to measuring liquidity give similar results in assessing the liquidity of households, and also to answer a question whether it is sufficient to apply only dynamic approach in assessing the liquidity of households. As the object of the research some family farms were chosen which had maintained continuous accounting records of agricultural transactions for the period of 2004-2011 and reflected in the balance sheet all short-term accounts payable and negative cash flows from financing activity. With the dynamic approach to calculation of the liquidity ratio the information was used about the funds received from operating activity, and about the funds which farmers classified as savings. A comparison of current and quick ratio has been done. It has been established that there is a very strong correlation between the figures obtained with the dynamic and static approach, though higher rates are observed in case of current liquidity indicator use. According to the author, due to the family farm specifics, namely, inventories problem intended for domestic needs, a measure of liquidity should use the dynamic approach.

Suggested Citation

  • Joanna Berezhnitska, 2013. "Dynamic and Static Evaluation of Financial Liquidity in Family Farms," Accounting and Finance, Institute of Accounting and Finance, issue 4, pages 87-93, December.
  • Handle: RePEc:iaf:journl:y:2013:i:4:p:87-93

    Download full text from publisher

    File URL:
    Download Restriction: no

    File URL:
    Download Restriction: no

    More about this item


    family farms; liquidity valuation; dynamic approach; static approach; liquidity ratios; cash flows;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill


    Access and download statistics


    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:iaf:journl:y:2013:i:4:p:87-93. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Serhiy Ostapchuk). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.