engleski

Impact of method used for the evaluation of the needs for external financing on the success of liquidity

One of the prerequisites for the preservation of company’s liquidity is planning the needs for external sources of financing. That can be done by quality budgeting. This fact has motivated the authors to explore if large companies in Croatia used methods for evaluating the needs for external financing in 2008 according to the criteria given in the Accounting Act, and which methods they used (independent variable). In order to determine if a certain company's liquidity has improved or deteriorated in 2008 in relation to 2007, the authors in their research used the data from the companies’ balance sheets for 2007 and 2008. The criteria for determining the improvement or the deterioration of the liquidity was the current liquidity ratio for 2007 and 2008. After the improvement or the deterioration of a company’s liquidity (dependent variable) was determined, that data was put in relation with the choice of the method for the evaluation of the needs for external financing (independent variable). In this way the authors determined weather there is a statistical significance between a successful liquidity management and the method for evaluating the needs for external financing.

global financial crisis ; liquidity ; external sources of financing ; budgeting

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