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Financial Liquidity and Profitability Management in Practice of Polish Business

In: Financial Environment and Business Development

Author

Listed:
  • Katarzyna Goldmann

    (Nicolaus Copernicus University)

Abstract

From the point of view of companies’ survival strategies, in the short term, financial liquidity plays a more important role than profitability does. In the case when the company is not profitable in the short term but is characterized by good financial liquidity, it has the potential for further development and for improving its performance. However, in a long-term perspective, profitability is more important because its lack in the long term will result in lacking financial liquidity. Therefore, an important element of company management is making a systematic analysis of financial liquidity and profitability, both on the basis of financial statements and on data derived from its accounts. The objective of the article is to present Polish companies’ approach to managing financial liquidity and profitability. The article presents the results of a survey made on the issue. Based on the survey, the extent of the use in making management decisions of the following was determined: liquidity ratios, working capital and the demand for working capital, analysis of the cash flow statement, and indicators of profitability. The researched entities indicated the extent of usefulness of managing receivables, liabilities, inventory, and cash in financial liquidity and profitability management.

Suggested Citation

  • Katarzyna Goldmann, 2017. "Financial Liquidity and Profitability Management in Practice of Polish Business," Eurasian Studies in Business and Economics, in: Mehmet Huseyin Bilgin & Hakan Danis & Ender Demir & Ugur Can (ed.), Financial Environment and Business Development, pages 103-112, Springer.
    • Handle: RePEc:spr:eurchp:978-3-319-39919-5_9
    DOI: 10.1007/978-3-319-39919-5_9
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