Accounts Receivable Levels in Relation to Risk Sensitivity in Manufacturing Firms in V4 Countries: 2003-2012 Data Testimony

Abstract

Accounts receivables to total assets in manufacturing entities is relationship that could serves as forecasting bad news indicator about general economic condition of economy. Individually each entity try to suit its trade credit policy to its business environment. Individual risk sensitivity is an result of entity answer on changes in its internal economic health but also is response on general economic changes. Here we present accounts receivables to total assets indicator in Czech, Hungarian, Polish and Slovak manufacturing firms. That results are presented in three business environment conditions: 2003-2006 period, judged by us as "before the crisis," 2007-2009 "during the crisis," and 2010-2012 "after the crisis." Empirical data confirms our projections derived from theory based on FLIEM model.

Keywords: sensitivity on risk, liquidity management, cost of capital, financial flexibility

JEL Classification: G11, G31, G32