The Inter-branch Liquidity Comparison of Polish Stock Exchange Companies on the Basis of Working Capital
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The aim of the research presented in this paper is to evaluate the liquidity of non-financial public companies listed at Warsaw Stock Exchange both in 2004 and 2005. The evaluation is based on selected working capital ratios. The three basic features analysed include working capital related to turnover, assets, inventory and due debts. The ratios were analysed both in the whole number of companies, as well as considering each of the economic sectors of building, industry and services separately. The results obtained from the research reveal significant disparities between the empirical ratios and those considered as optimal, which proves inadequate working capital management. In most cases examined it results in an insufficient level of working capital as a liquidity reserve. However there are also many cases where the amount of working capital exceeds the desirable limit. The paper also indicates some likely reasons for the discrepancies between the real and standard ratios and suggests possible ways of reducing them.
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