The Relationship between Liquidity and Firms’ Profitability: A Case Study of Karachi Stock Exchange

Bibi, Nazish; Amjad, Shehla

doi:10.5296/ajfa.v9i1.10600

Cited by 31 publications

(29 citation statements)

References 3 publications

(7 reference statements)

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…The higher the liquidity of the firms, the better the firms' performance in term of ROA and ROE. This result is consistent with prior studies made by Bibi and Amjad (2017) and Janjua, Asghar, Munir, Raza, Akhtar, and Shahzad (2016). This inferred that firms have enough resources to pay off their debts with the available current assets.…”

Section: Descriptive Statisticssupporting

confidence: 94%

Corporate Social Responsibility Disclosure and Firm Performance of Malaysian Public Listed Firms

Razali¹,

Sin²,

Lunyai³

et al. 2018

IBR

View full text Add to dashboard Cite

Corporate Social Responsibility (CSR) disclosure has become a rising concern for the public listed firms worldwide due to its ability to enhance firm's market performance and financial performance. The main objective of this study is to investigate the relationship between CSR disclosure and firm performance of Bursa Malaysia's listed companies based on their market value added (MVA), return on equity (ROE) and return on assets (ROA). 324 samples of public listed companies' annual report for the period of 2014 to 2016 were obtained from Bursa Malaysia and examined. The extent of their CSR disclosure were measured and analyzed. After accounting for control variables such as firm size, firm age, firm leverage and firm liquidity, the result shows that there is a positive significant relationship between CSR disclosure and firm performance in terms of ROA and ROE. This reveals that high level of CSR disclosure helps firms to achieve optimum performance through increased competitiveness, improved firm's image amongst society, and creates new opportunities in the marketplace. The findings also showed mix results among the control variables towards firm performance. For future research, this paper recommends to extend the study by using different CSR disclosure measurement, different firm performance measurement such as return on investments (ROI) and Tobin's Q and different samples.

show abstract

Section: Descriptive Statisticssupporting

confidence: 94%

Corporate Social Responsibility Disclosure and Firm Performance of Malaysian Public Listed Firms

Razali¹,

Sin²,

Lunyai³

et al. 2018

IBR

View full text Add to dashboard Cite

show abstract

“…Eljelly (2004) showed a negative correlation between liquidity and profitability. Some liquidity variables have positive, and some others have a negative association with profitability (e.g., Bhunia, 2013;Bibi & Amjad, 2017;Egbide, Uwuigbe, & Uwalomwa, 2013;Nassirzadeh & Rostami, 2010;Priya & Nimalathasan, 2013). There is a significant negative association between the firm's profitability and its liquidity (Eljelly, 2004).…”

Section: Introductionmentioning

confidence: 99%

“…There is a significant negative association between the firm's profitability and its liquidity (Eljelly, 2004). Cash gap has a significant negative relationship with return on assets, whereas current ratio, log of sales and log of total assets have a significant positive correlation with ROA (Bibi & Amjad, 2017). Profitability has a substantial and negative relationship with current ratio and cash conversion cycle, whereas it has a significant and positive relationship with the liquid ratio, net liquid balance index, and comprehensive liquidity index (Nassirzadeh & Rostami, 2010).…”

Section: Introductionmentioning

confidence: 99%

Does Corporate Governance Moderate the Relationship between Liquidity Ratios and Financial Performance? Evidence from Indian Pharmaceutical Companies

Farhan¹,

Alhomidi²,

Almaqtari³

et al. 2019

AJIS

View full text Add to dashboard Cite

The current study is going to examine the impact of liquidity ratios on the financial performance of Indian pharmaceutical companies. Furthermore, it attempts to find out whether corporate governance moderates the relationship between liquidity and firms' performance. The analysis of this paper is based on a panel data approach of 82 pharmaceutical companies, for the period from 2008 to 2017. GMM model is used for estimating the results. Two accounting-based measures and one marketing based measure are used as proxies for firms' financial performance. Current ratio and quick ratio are used as proxies for independent variables. Leverage and firms' size are used as control variables. The study found that the current ratio and quick ratio significantly and positively impact pharmaceutical companies' financial performance measured by return on assets and Tobin Q. Moreover, it was found that corporate governance moderates the relationship between current ratio, quick ratio, and net operating margin. It seems that the impact of liquidity ratios on firms' performance has been over-studied and the literature is overwhelming. However, this study adds a new contribution to the existing literature by introducing a corporate governance as a moderation factor.

show abstract

“…Second they want to minimize the liquidity risk of the firm. Firms can attain maximum profit by reducing their cash conversion cycle and by strongly managing their AR [6].…”

Section: Background Of the Studymentioning

confidence: 99%

The Effects of Working Capital Management on Profitability of Manufacturing Companies: The Case of Dire Dawa City

Girma¹

2019

SJBM

View full text Add to dashboard Cite

In every organization, corporate finance deals with three decisions: capital structure decisions, capital budgeting decision, and working capital management decisions. Among these three decisions, working capital management is recognized as an important concern of the financial manager. The study examines the effects of working capital management on profitability of manufacturing companies in Dire Dawa city and have the following research objectives: Examine the effect of number of days account receivable (NDAR) on profitability of manufacturing companies, Examine the effect of number of days inventories (NDI) on profitability of manufacturing firms, To investigate the effect of no of days account payable (NDAP) on profitability of manufacturing firms and Examine the effect of cash conversion cycle (CCC) on profitability of manufacturing firms. The research was quantitative that utilizes secondary data of companies from 2011 -2015 for sample of 14 companies to address the objectives. The study purposively selected Dire Dawa city this is because of the majority of the Eastern region industries found in this city. The secondary data was collected from different company's records about from audited balance sheet and income statement that was submitted to Ethiopian revenue and custom authority Dire Dawa branch and Dire Dawa Administration Revenue Authority for tax purpose. The result of the study shows that there is significantly negative relationship between number of date account receivable, number of day's inventory holding and company's profitability. The study reveals that there is no significant relationship between number of days account receivable and profitability. But cash conversion cycle has significant negative relationship with profitability. Moreover debt ratio has statistically negative relationship with company's profitability.

show abstract

The Relationship between Liquidity and Firms’ Profitability: A Case Study of Karachi Stock Exchange

Cited by 31 publications

References 3 publications

Corporate Social Responsibility Disclosure and Firm Performance of Malaysian Public Listed Firms

Corporate Social Responsibility Disclosure and Firm Performance of Malaysian Public Listed Firms

Does Corporate Governance Moderate the Relationship between Liquidity Ratios and Financial Performance? Evidence from Indian Pharmaceutical Companies

The Effects of Working Capital Management on Profitability of Manufacturing Companies: The Case of Dire Dawa City

Contact Info

Product

Resources

About