Abstract
This study is conducted to investigate the impact levels of determinants influencing liquidity of listed steel firms on Vietnam Stock Exchange. Data were collected from audited financial statements of 25 listed food processing firms from 2014 to 2017. This research employs the least squares method (OLS) and tests to determine the influence of factors on the liquidity of listed sample firms. The results indicate that return on assets (ROA), operating period (AGE) and asset structure (AS) have positive impacts on the liquidity. In contrast, the firm size and debt ratio has the opposite effects. Based on the findings, a number of recommendations are proposed to increase the liquidity ratio of listed firms in the future. Keywords: Liquidity, steel firms, determinants, Vietnam Stock Exchange DOI : 10.7176/EJBM/11-7-10 Publication date :March 31 st 2019
Highlights
Liquidity is the availability of resources that can be quickly converted to meet short-term cash requirements
The results showed that the bank scale (SIZE), credit risk (LLP), equity ratio on total capital (CAP), the loan-to-asset ratio (TLA) and the growth rate of gross domestic product (GDP) were factors that possess negative and statistically significant correlation to the liquidity ratio
This study focuses on steel firms as www.iiste.org respondents but with larger sample size, a more current period to research and especially determinants included in the model are more comprehensive
Summary
Liquidity is the availability of resources that can be quickly converted to meet short-term cash requirements. Assets like stocks and bonds are very liquid since they can be converted to cash within days. For individuals or in firms, it cannot be denied that liquidity is really important. If assets are not already available to be turned into cash, businesses and people can find themselves in liquidity issues, even when the sum value of the assets are high. In order to conform to agreed-upon short-term obligations even in situations where the lack of liquidity is present, the firms that are indebted to creditors and banks may be forced to sell its assets that were not wish to be liquidated. While withholding some assets as collateral and lending money to firms, banks hold essential standings in the market
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