Optimalization of Liquidity Strategy: Polish Nonprofit Organizations Case

7 Pages Posted: 26 Dec 2012

See all articles by Grzegorz Michalski

Grzegorz Michalski

Uniwersytet Ekonomiczny we Wrocławiu - Faculty of Engineering and Economics

Date Written: December 25, 2012

Abstract

In dependence of kind of realized mission, sensitivity on risk, which is a result of decision about liquid assets investment level and liquid assets financing. The kind of organization influence the best strategy choice. The organization choosing between various solutions in liquid assets needs to decide what level of risk is acceptable for her owners and capital suppliers. That choice results with financing consequences, especially in cost level. It is a basis for considerations about relations between risk and expected benefits from the liquid assets decision and its results on financing costs for both nonprofit or for profit organizations. The paper shows how in author opinion decisions about liquid assets management strategy and choice between kind of taxed or non-taxed form inflow the risk of the organizations and its economical results during realization of main mission. Comparing the theoretical model with empirical data for 1000 Polish nonprofit organization results, suggest that nonprofit organization managing teams choose higher risky aggressive liquid assets solutions than for-profit organizations.

Keywords: liquidity value, short-run financial management, financial liquidity, liquid assets, working capital

JEL Classification: G31, L31, M21

Suggested Citation

Michalski, Grzegorz, Optimalization of Liquidity Strategy: Polish Nonprofit Organizations Case (December 25, 2012). Available at SSRN: https://ssrn.com/abstract=2193706 or http://dx.doi.org/10.2139/ssrn.2193706

Grzegorz Michalski (Contact Author)

Uniwersytet Ekonomiczny we Wrocławiu - Faculty of Engineering and Economics ( email )

ul. Komandorska 118-120
Wroclaw, 53-345
Poland

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