Download This PaperFinancial Crisis Influence on Risk Sensitivity and Answer of Businesses by Increasing Cash Levels: Slovak and Polish Manufacturing Firms Data
CURRENT PROBLEMS OF SLOVAK PRACTICE, V. ŠOLTÉS, B. GAVUROVÁ (ed.), Technická univerzita v Košiciach, ISBN: 978-80-553-1606-2, (VEGA č. 1/1050/12 "Návrh systému merania výkonnosti v zdravotníckych zariadeniach na Slovensku a implementácia metrík výkonnosti"), Kosice, 2013, pp. 186-192
16 Pages Posted: 16 Mar 2014 Last revised: 16 May 2014
Date Written: December 14, 2013
Abstract
According to FLIEM model predictions, before the crisis, during the crisis and just after the crisis phases should be connected with higher levels of cash investments. Investments in financial liquidity of the businesses are done as hedging method against higher risk sensitivity. That is done by investing money in current assets. The goal of the paper is to check the statistical significance of changes in current assets levels during three crisis connected phases. We have found that FLIEM model works and that cash to total assets indicator should be treated as forecasting indicator about future risk sensitivity of the firms. That could be used also as warning signal about future standing of whole economy as well.
Keywords: cash levels, current assets, financial liquidity, risk management, cash management
JEL Classification: G31, G32, G17, G02
Suggested Citation: Suggested Citation