Financial 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

See all articles by Grzegorz Michalski

Grzegorz Michalski

Uniwersytet Ekonomiczny we Wrocławiu - Faculty of Engineering and Economics

Manuela Raisova

Technical University in Košice (TUKE)

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

Michalski, Grzegorz and Raisova, Manuela, Financial Crisis Influence on Risk Sensitivity and Answer of Businesses by Increasing Cash Levels: Slovak and Polish Manufacturing Firms Data (December 14, 2013). 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. Available at SSRN: https://ssrn.com/abstract=2409207 or http://dx.doi.org/10.2139/ssrn.2409207

Grzegorz Michalski (Contact Author)

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

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

Manuela Raisova

Technical University in Košice (TUKE) ( email )

Letná 1/9
Košice, 04200
Slovakia

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