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The Effect of Selected Financial Indicators on Liquidity of Companies in Selected Sectors in the Czech Republic

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  • Markéta Šeligová

    (Department of Finance and Accounting, School of Business Administration, Silesian University, Univerzitní nám. 1934/3, 733 40 Karviná, Czech Republic)

Abstract

The aim of this paper is to determine the effect of selected financial indicators related to the structure of funding sources on liquidity of companies in selected sectors in the Czech Republic from 2000 to 2015. With the purpose to fulfill the aim, we examine existence and character of relationship between selected financial factors related to the structure of funding sources (debt equity ratio, return on equity, share of fixed assets to total assets, share of earnings before interest and taxes to total assets) and liquidity of the companies in sectors such as mining and quarrying, manufacturing, construction, service sector and energy sector. The existence of relationship between financial indicators related to the structure of funding sources and liquidity of companies is tested by correlation analysis and regression analysis. The results show that there is the negative impact of share of fixed assets to total assets on liquidity of companies in service sector in the Czech Republic. The liquidity of companies was positively influenced by the return on equity and negatively influenced by debt equity ratio in energy sector in the Czech Republic.

Suggested Citation

  • Markéta Šeligová, 2017. "The Effect of Selected Financial Indicators on Liquidity of Companies in Selected Sectors in the Czech Republic," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 65(6), pages 2095-2104.
    • Handle: RePEc:mup:actaun:actaun_2017065062095
    DOI: 10.11118/actaun201765062095
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    Cited by:

    1. Filip Hampl, 2020. "A statistical analysis of the financial performance of organic and conventional farms in the Czech Republic with respect to their size," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 66(1), pages 1-9.

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