Financial Consequences Linked with Investments in Current Assets: Polish Firms Case

European Financial Systems 2013, Proceedings of the 10th International Scientific Conference, Brno: Masaryk University, 2013

12 Pages Posted: 16 Mar 2014

See all articles by Grzegorz Michalski

Grzegorz Michalski

Uniwersytet Ekonomiczny we Wrocławiu - Faculty of Engineering and Economics

Date Written: 2013

Abstract

Investments in financial liquidity of the firm are done thru investing money in current assets. The goal of the paper is to find if efficiency measure ROA is linked with current ratio, liquidity ratio and collection period. Paper presents a classification of financial consequences of managerial decisions in current assets investments level. There are two kinds of current assets investment influences: positive, linked with cash revenues stimulation and decreasing level of risk, and negative, linked with increasing cash expenses. Financial liquidity decisions could be considered from three perspectives: from intrinsic value of financial liquidity compared with market value of liquidity point of view, from risk sensitivity on current assets investments consequences point of view and from behavioral finance approach to financial liquidity investments point of view. The paper concerns with risk sensitivity on current assets investments consequences point of view. Discussion and classification is illustrated by empirical evidence from Polish firms data.

Keywords: current assets, financial liquidity, risk management

JEL Classification: G31, G32, G17, G02

Suggested Citation

Michalski, Grzegorz, Financial Consequences Linked with Investments in Current Assets: Polish Firms Case (2013). European Financial Systems 2013, Proceedings of the 10th International Scientific Conference, Brno: Masaryk University, 2013. Available at SSRN: https://ssrn.com/abstract=2409189

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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