Factors affecting liquidity ratios pdf. Solano 2 & Sergio M.

Factors affecting liquidity ratios pdf Keywords: Liquidity coverage ratio, liquidity risk, basel III, conventional commercial bank, Indonesia. In the process, it will empirically investigate both internal and external factors that affect the steel listed firms’ liquidity in Vietnam. The liquidity gap is the difference between assets and liabilities at both present and future dates. For this purpose, the study uses a random effect panel data regression model and tests it with data on Indian banks for 21 years, covering the period from 1996 to 2016. Factors that affect LCR before the pandemic are CASA, CAR, NPL, ROA and BOPO. & Dutta, A. The relationship between assets and liquidity risk (financing gap) is accordingly expected to be non-linear. Aspachs et al. ), ROAA, Cost Sep 4, 2019 · This paper aims to investigate how financial variables and exogenous crises influence firms’ financial performance, and how these factors may help managers in decision-making to increase their firm’s wealth. 2016. The selected independent variables are liquidity, tangibility, premium growth, firm age and firm size. Based on these 5 variables, 6 hypotheses were developed and used in determining the impact of liquidity on profitability. Dec 29, 2023 · may affect the liquidity-return ratio. As markets become global, an accompanying threat to small and less developed markets is the drying up of liquidity in domestic markets with a concurrent transfer of that liquidity to other major markets in the region. In this context, 10 deposit banks with the highest asset size according to their 2020 end This study examines the bank-specific and macro-economic factors affecting bank liquidity for eight commercial banks in Ethiopia, covering the period of 2002-2013 by using balanced fixed effect panel regression. The objective of this study is to examine the liquidity (LQD) determinants of Indian listed commercial banks. The following sections are typical studies on factors affecting liquidity. 3. Several possible determinants are taken into account in the May 20, 2019 · “Although Indian banks have largely been able to adhere to the guidelines of the Reserve Bank of India for managing liquidity, factors affecting liquidity in Indian banks remain relatively unidentified owing to a scarcity of studies on management of liquidity in Indian banks” (Bhati & Zoysa, Citation 2012). In the context of the realm of business, the liquidity ratio plays an imperative role in all possible ways. . aimed to determine the factors that affect the CAR. The paper uses fixed effect model (FEM) to study the factors affecting the liquidity ratio of 34 Vietnamese commercial banks in the period of 2005-2019. The sample used in this study is the banking industry listed on the Indonesia Stock Exchange (IDX) from 2007 until 2018. Republic of North Macedonia measured through gross loans to total assets ratio. uk This paper focuses on the analysis of the influence of internal factors on the liquidity of commercial banks. May 6, 2021 · Zhang et al. Aug 13, 2018 · The results also show a negative relationship between both debt equity ratio and leverage ratio and profitability. As th is ratio increas e, liquidity 5. The finding indicates that the average increase in liquidity of banks was 2. The information has displayed by use of tables and graphs. Utilizing data from 24 companies listed on the Indonesia Stock Exchange from 2018-2022, the research employs multiple linear regression analysis to investigate these factors' impact on profitability Feb 14, 2024 · Factors affecting liquidity ratios related to accounts receivable and payable include: Days Sales Outstanding (DSO): DSO measures the average time a company takes to collect its receivables. This paper studies the liquidity management in India from 1998 to 2010 and analyses the determinants of liquidity in India. May 5, 2022 · The article assesses the impact of internal and external factors affecting the liquidity of Vietnamese commercial banks. Classification of factors affecting bank liquidity 1 Internal factors affecting the liquidity of banks include the bank's capital base, asset quality, deposit base, level and quality of management, balance sheet demand and liabilities, quality of Jan 1, 2021 · The study aims to examine the impact of liquidity and solvency management on the financial performance of Jordanian manufacturing companies listed on the Amman Stock Exchange, for a period of 10 Mar 31, 2019 · Analysis with one-year lagged variables reaffirms the significance of liquidity ratio, capital adequacy, and increased capital ratio in enhancing bank performance, particularly in terms of return Liquidity ratio is a set of ratios that are used to measure the capability of paying off the short term or long term debt obligations of a company. Observational data was collected from 28 commercial banks for the period Apr 20, 2021 · The paper uses fixed effect model (FEM) to study the factors affecting the liquidity ratio of 34 Vietnamese commercial banks in the period of 2005-2019. Analyzing the Dec 10, 2019 · This paper examines the long-term effect of various regulatory, bank-specific and macroeconomic factors on the determination of liquidity in Indian banks. The study confirms that commercial banks’ internal factors play the most important role, and there is no empirical evidence on macro variables that affect liquidity risk. The liquidity ratio indicates the company’s ability to meet its short-term financial obligations. May 21, 2024 · Level liquidity is an important factor that helps the growth and survival of commercial banks. The results highlighted the better liquidity positions of the Islamic banks in comparison to the conventional ones, both banks’ liquidity levels were positively related to the capital The average value of company size (A) was approximately 21 percentages, measured by natural logarithm of total assets. Companies that Assessing the factors affecting the liquidity risk in Jordanian commercial banks: a panel data analysis Nov 1, 2021 · Download full-text PDF Read full-text. co. In general, the larger the ratio, the stronger will be the capabilities (except some exceptions) to pay the debt off. Jul 1, 2020 · The main purpose of this study is to investigate factors affecting liquidity of Islamic banks in Saudi Arabia. (2005) investigated the liquidity determinants of 57 banks in the UK, using quarterly data from 1985 to 2003. Research methods and procedures Sample selection The literature review on factors affecting financial performance of firms provides valuable insights into the various factors that can impact a firm's financial performance. The focus is on the liquidity in banks and nonbanking financial institutions. Nov 30, 2021 · include liquidity, leverage, efficiency and profitability ratios [30]. Meanwhile, efficiency quidity ratios based on assets and liabilities, and suggested diferent factors that determine each of these liquidity ratios. greatly affect the liquidity ratios, and liquidity ratios may be and environmental performance are investigated as potential factors of environmental disclosure in Figure 1. pdf Available via license: CC BY-NC-ND 4. Different industries have varying liquidity requirements, and comparing companies across industries using liquidity ratios may not provide accurate results. deposit asset ratio, loan asset ratio, loan to deposit ratio, equity ratio, financial assets ratio simultaneously affect the capital adequacy ratio significantly. More specifically, the most important liquidity ratio of L1 (liquid assets to total assets ratio) showed a significant relationship with macroeco-nomic variables of discount rates, call rates, foreign exchange reserve, exchange rate with US dollar, consumer price index and gross domestic product. For instance, NBE has reduced statutory reserve requirement from 15 percent to 10 percent and then to 5 percent and liquidity ratio requirement from 25 percent to 20 percent and then to 15 percent under Directives No. It has become the obligatory criteria in analyzing the liquidity ratio for a better understanding of the world of business nuances in general and the status of the company in particular. ,These results benefit banks (LIQ), credit development (CRD) ratio, external funding (EFD) ratio, and credit loss provision (LLP) ratio on liquidity risk. , which can Jan 1, 2012 · This study investigates the effects of 7 internal corporate factors on the liquidity of 30 French and 30 Taiwanese banks and uses the Quick Ratio (LIQ) as a liquidity proxy using quarterly data This study examines the bank-specific and macro-economic factors affecting bank liquidity for eight commercial banks in Ethiopia, covering the period of 2002-2013 by using balanced fixed effect panel regression. liquidity ratios, management efficiency ratios Aug 1, 2024 · Usman et al. determinants between before the COVID-19 pandemic and during the pandemic. ,Due to the time limitation, the data includes only 120 companies listed in bursa Malaysia and covers the period from 2012 to 2014. Cogent Economics & Finance, 2019. Also, the Jun 27, 2023 · Factors Affecting Liquidity Ratios. inferior research design has utilized via regression analysis to determine the relation between the dependent variable and the independent factors. pdf. Sep 4, 2018 · Correlation and regression analysis as well as the descriptive statistics were applied in the analysis and findings suggest that Liquidity ratios (Quick ratio) have positive and significantly Jan 31, 2022 · Request PDF | Investigating Bank-Specific and Macro-Economic Factors Affecting the Liquidity Position of Islamic Banks in Pakistan | Purpose- Today, not only the financial but also the non Mar 23, 2022 · Based on panel data analysis, current study suggests that bank specific factors (except capital), macroeconomic factors and market competition significantly affect liquidity reserves of banks in Dec 1, 2019 · The results of this study show that many bank-specific factors significantly affect banks' profitability, including capital ratio, bank size, management efficiency, credit risk, and diversification. The empirical results show that the bank size, the ratio of equity to total capital, credit risk, Jan 10, 2023 · Making Impact on Common Financial Factors Affecting Liquidity Ratio Based on Greedy Approach Through Price Movement in Stock Market January 2023 DOI: 10. n¦r «Š‹:}îîr*‡‹¼¨_Å. The issuance of the going concern audit opinion also has a relationship with the company’s financial condition, namely, liquidity ratio and leverage. Diverse components of current assets and current liabilities should be managed in such manner that an organization is 4. Fernández 3 We analyze the factors that explain banks’ profitability There are many studies on the factors affecting the liquidity of commercial banks in the world. The population of this study are banks that are required by the Financial Services Authority to calculate and publish May 23, 2020 · PDF | Banking system of anation plays a prominent role in shaping the economy by developing the financial systems. The proper management of working capital may bring about the success of a business firm. the average value of loan to deposit ratio is 2. Liquidity risk can be measured by two main methods which are liquidity gap and liquidity ratios. Meanwhile, during the pandemic factors that affect LCR are SIZE, CASA, CAR, NPL and ROA. To make informed financial management decisions, it is nece ssary to monitor key economic indicators such as interest rates, inflation, and the Dec 1, 2021 · This paper aims to establish the financial factors affecting the financial performance of Philippine MSMEs whose audited financial statements are utilized to extract financial ratios needed for 2017. The study covers all listed companies listed on the Indonesian Stock Exchange from 2017 to 2020. They found that interest margin and Dec 13, 2022 · PDF | This article reviews the influence that aims to really know about liquidity ratios, slovability, and activities that affect the company's | Find, read and cite all the research you need Jan 30, 2020 · Based on panel data analysis, we suggest that bank-specific (except cost of funding) and macroeconomic (except unemployment) factors significantly affect bank liquidity. Several factors can influence a company's liquidity ratios, including: Industry Standards. liquidity, factors affecting liquidity in Indian banks remain relatively unidentified owing to a scarcity of studies on management of liquidity in Indian banks (Bhati & De Zoysa, 2012). The model considers the effect of regulatory factors, cash reserve ratio The major limitation of this study was that Using the OLS regression model with fixed and it only considered one aspect of liquidity and did random effects and data on Indian banks for the not consider the liquidity policy factors, such as period from 2000 to 2013, Singh and Sharma (2016) cash reserve ratio and statutory liquidity ratio This research investigates factors affecting liquidity of banks operating in Pakistan. In the study, the size of the bank, the rate of (Iqbal 2012) used a ratio analysis to compare the liquidity of five Islamic banks to 22 conventional counterparts in Pakistan during 2007-2010. size of banks on liquidity, but ratio of total loans to factors affecting li quidity of Indian banks’ with a motive to Dec 21, 2012 · The development, assessment and application of the commercial bank liquidity risk management was based on an analysis of scientific resources, a comparative analysis and mathematical calculations Nov 27, 2020 · The study aims to determine the possible internal factors affecting the liquidity position of the commercial banking industry of Jordan. Accordingly, liquidity ratios measure the ability to discharge liabilities using the assets while leverage ratios measure the ability to use capital through the optimal mixture of liabilities and equity. Operating Cycle 7. divided the factors affecting liquidity of commercial banks into external and internal levels, and find total asset, liquidity ratio, capital adequacy ratio, etc. Apr 20, 2016 · Liquidity Ratios. £ÿÿPeàÌøzXPÕ*!î {Uüú㯠þû À9 ¾ZÔ —ÿ„'¬— ¼U ~У µðç‡ pi½W €mk´ÒÎüà TÄÍ | ?ïñ¶¼-Ñ wS¼©œ ó¾¼ÍÛ ÈnW*)£ Š Bù µ“9ÿy3ëß £ÈÎ o Ö[#{¼1³vÖ »UB™IOÆ ñˆ ²f™e=odþ›+;+ke¼¹þÍ·ç;3sd씑=@ë´a6æ1£ ™ê1õbòÅ0Q ÑÿôÄè—5ٛȩè÷² `ž“uç. 21203/rs. Using the OLS regression method for analysis, it was found that These variables are company size (as measured by total sales), working capital (WC), company efficiency (asset turnover ratio), liquidity (current ratio), and leverage (debt-equity ratio and Apr 26, 2021 · On the other hand, factors that could be affect the performance of the banks were capital adequacy, assets quality, management capacity, earning quality, liquidity position, GDP and age of banks statutory reserve requirement and liquidity ratio. Secondary data are collected from the annual report of commercial banks. In correlation Analysis, there is negative correlation between SIZE and liquid 2019. Jul 7, 2023 · Every company would want a good company performance in order to get maximum profit. + Ratio of liquidity reserve to total assets (LRA) Factors Affecting Liquidity Risk JED No. Factors Impacting Liquidity in Emerging Markets Liquidity is becoming a critical issue in capital market development initiatives. factors that affect the Liquidity management has proved to be difficult in India after financial liberalisation in 1991. Independent variables are bank size, leverage, loan loss reserves, net interest margin, loan asset ratio, and liquidity. Three fundamental factors affect capital adequacy in Jordan; risk, return and activity. The purpose of this study was to determine and identify the impact of company size, quick ratio, leverage, asset turnover and asset structure on profitability. The purpose of this research project is to examine the factors that impact in and their significance to Pakistan commercial and Islamic banks liquidity This Project has characterized the independent factors into bank-specific factors and macroeconomic factors The bank-specific factors include Capital Adequacy , Return on Equity and Net Interest Margin , Provision to Loan and Cost to This study examines the bank-specific and macro-economic factors affecting bank liquidity for eight commercial banks in Ethiopia, covering the period of 2002-2013 by using balanced fixed effect panel regression. Jun 30, 2019 · PDF | Abstract: Among the many return indicators, Return on Assets (ROA) is mostly used by firms’ managers to measure the performance of a company. 44, which means that there is a concern of liquidity risk. Solano 2 & Sergio M. 219 January 2014| 39 Liquidity reserve may fall into two categories: primary and secondary reserve, which is a traditional liquidity control of Oct 13, 2021 · The aim of this study is to determine the factors affecting the liquidity risk of deposit banks in Turkey. H3: There is no significant difference between Bangladesh and India's banking sector based on Profitability impacting factors. Over the last two decades, analysis of bank . The empirical results show that the bank size, the ratio of equity to total capital, credit risk, The study makes an empirical analysis on the factors affecting the liquidity risk of listed commercial banks. Therefore, the choice of nonperforming loan ratio and capital adequacy ratio as - PDF | On Jan 1, 2019, Svetlana A. Liquidity Versus Profitability: Risk-Return Tangle INTRODUCTION It has been often observed that the shortage of working capital leads to the failure of a business. The study has applied both GMM and pooled, fixed and random effect models to a panel of 37 commercial banks listed on the Bombay Stock Exchange (BSE) in India for the period from 2008 to 2017. he irst Liquidity ratio “(L1) – Liquid assets to total assets ratio – has a positive correlation with capital, interest rate on loans and percentage of non-performing loans to stipulated cash reserve requirements ratio (crr), their liquidity ratio (lr), inflation (inf), exchange rate (exr), and gross domestic product (gdp) as independent variables for the period; 1975 – 2014. Reducing DSO improves liquidity by accelerating cash inflows. From the regression analysis, it was found that Gross Domestic Product and liquidity ratio of May 1, 2020 · Download full-text PDF Read full-text. This | Find, read and cite all the research to several external factors beyond the company ’s financial factors. H2: Microeconomic factors/variables (external factors) have no significant impact on profitability (ROA ad ROE) of banking sector in Bangladesh and India. Factors Determining Working Capital 6. 77% per quarter from Te model considers the efect of regulatory factors, cash reserve ratio, and statutory liquidity, and incorpo- rates four diferent liquidity ratios specifc to the Indian banking scenario. The findings of this study indicate that only DAR significantly impacts profitability computed as ROE while all the other hypotheses proved insignificant. Banks’ internal factors bank size, capital Jun 1, 2016 · An empirical analysis of macroeconomic and bank-specific factors affecting liquidity of Indian banks. This study will focus on pure internal factors that affect bank lending as proxied by LDR. rs-2462526/v1 Apr 4, 2023 · This research identifies factors that explain the liquidity of commercial banks in the Vietnam banking system from 2010 to 2015. The study is based on secondary data of 21 insurance companies with 168 observations for the period from 2011/ This study aims to examine and analyze the effect of Return On Assets (ROA), Capital Adequacy Ratio (CAR), Operational Costs to Operating Income (OCOI), Non Performing Loans (NPL), Third Party Funds (TPF) and bank size on Liquidity Coverage Ratio (LCR) in the banking sector. To this end, the study adopts a mixed methods research approach by combining documentary analysis and in-depth interviews. Theoretical framework: The theoretical framework focuses on the Tabari et al. Jun 19, 2019 · The other results show liquidity ratio measured by current ratio, activity ratio measured by total asset turnover, and solvency ratio measured by debt to equity ratio has an insignificant effect capital and investment ratio. Some of the key factors identified in the literature include the firm's size, capital structure, the level of debt, the level of liquidity, leverage ratio and the Aug 3, 2020 · Download full-text PDF Read full-text. This research aims to show the factor affecting the liquidity risk of commercial banks in Nepal. This study examines the determinants of profitability within Indonesia's food and beverage industry, specifically analyzing the role of firm size, liquidity, efficiency, leverage, and market power. Dec 31, 2021 · This study examines the factors affecting profitability in the context of Nepalese insurance companies. 0 Content may be subject to copyright. Asset sales or mortgages Dec 29, 2023 · Purpose: The purpose of the literature review is to examine and synthesize the current state of knowledge in the literature on the relationship between liquidity and profitability in companies. descriptive analysis of means, standard deviations, and CV. Spanning from 2007 through 2016 the sample of the study includes 23 banks by employing relevant econometric specifications. The LDR is the ratio used to assess bank liquidity as a comparison of total bank loans with total deposits. The effect liquidity concerns, whereas GDP and domestic credit have a positive impact. 219 January 2014| 39 Liquidity reserve may fall into two categories: primary and secondary reserve, which is a traditional liquidity control of commercial banks (Trương, 2012). FBJ. The dynamic interactions among variables were studied by applying a panel vector autoregressive model using annual data for a sample of non-financial firms from European countries Factors Affecting Liquidity Risk JED No. It aims to understand the importance of these two variables for the financial performance and long-term viability of organizations. To succeed, banks need to fully understand the internal and external factors that can affect their liquidity risk and implement appropriate risk management measures. Return on assets and return on equity are selected as the dependent variables. Firstly, the factors affecting liquidity risk of listed commercial banks are divided into external and internal levels, and then descriptive analysis carried out on the factors at two levels. The panel data were used to analyze and find the results from the period 2017 to 2021. The liquidity ratio was found to be approximately two percentages. Statement of Declaration I, Wubayehu Teshome declare that this thesis entitled: Factors Affecting Liquidity of Commercial Banks in Ethiopia and submitted in partial fulfillment of the requirements for the Degree of Master of Science in Accounting and Finance, is outcome of my own effort & study and that all sources of materials used for the study have been duly acknowledged. , (2013) finds that liquidity ratio is defined as the significant ratio composed of quick ratio and current ratio. Te results of the analysis show contrasting relationships between the independent variables and the dependent variables measured by four liquidity ratios. CONCLUSION Liquidity risk is an important part of commercial bank operations and plays a crucial role in maintaining the stability and flexibility of the financial system. The LDR is one of the main ratios of banks related to bank loans. Then the stability of data is tested. 001 Corpus ID: 168447016; An empirical analysis of macroeconomic and bank-specific factors affecting liquidity of Indian banks @article{Singh2016AnEA, title={An empirical analysis of macroeconomic and bank-specific factors affecting liquidity of Indian banks}, author={Anamika Singh and Anil Kumar Sharma}, journal={Future Business Journal}, year={2016}, volume={2 Feb 26, 2023 · A global analysis of bank profitability factors Prosper Lamothe 1 , Enrique Delgado 1 , Miguel A. 45/592 (NBE, 2008), The study makes an empirical analysis on the factors affecting the liquidity risk of listed commercial banks. Liquidity (current ratio) has no significant relationship with profitability. As a matter a fact, banks drawing on higher reserve may face less liquidity deficit. According to the regression findings, GDP per capita and the unemployment rate positively affect bank liquidity, whereas the inflation rate has a negative effect on bank liquidity. Boronenkova and others published Assessment of Liquidity Ratios as Indicators of an Organization’s Economic Security: Accounting Aspects | Find, read and Primarily, it deals with the appropriate liquidity factors that affect financial performance services pertained to several liquidity crises and the respective liquidity measures. Our analysis based on liquid assets data which includes Cash and other cash items (х1 See full list on ijecm. Based on the Liquidity is a bank's capacity to fund increase in assets and meet both expected and unexpected cash and collateral obligations at reasonable cost and without incurring unacceptable losses. Apr 11, 2021 · The world of business has become an important criterion for survival these days. (2018) looked at the bank-specific and macroeconomic factors that affect a bank's liquidity holdings to figure out what causes liquidity risk in Indian banks. Dec 31, 2020 · The study examines the impacts of liquidity ratio, leverage ratio, firm size, age of the firm and total debt on the profitability of non-life insurance companies in Nepal. In order to determine which factors affect the liquidity of the banks in RNM, the regression model includes secondary data on micro-factors affecting the liquidity of the banking sector, ie NPL / Gross loans (non-fin. Dec 10, 2019 · The model considers the effect of regulatory factors, cash reserve ratio, and statutory liquidity, and incorporates four different liquidity ratios specific to the Indian banking scenario. (2020). Dec 31, 2020 · The purpose of the research is to assess the factors affecting the liquidity of the commercial banks that are conducting mergers and acquisitions activities in Vietnam during the 2008-2018 period. This research investigates factors affecting liquidity of banks operating in Pakistan. Liquidity risk is the inability of a bank to meet such obligations as they become due, without adversely affecting the bank's financial condition. Aug 20, 2022 · Efficacious liquidity management is cardinal for being of an organization. The data covered the period from 2007-2017 for the four Islamic banks operating in DOI: 10. The other ratios developed to measure liquidity are the liquid ratio, liquid assets to total assets, and total deposit loans and advances to deposit. 1016/J. The testing in this study was carried out using the The paper uses fixed effect model (FEM) to study the factors affecting the liquidity ratio of 34 Vietnamese commercial banks in the period of 2005-2019. Download full-text PDF. Liquidity ratios on the other hand are three liquidity ratios and they include the current ratio, the quick ratio and the capital ratio (Mwangi, 2014). It was observed that the effect of deposit asset ratio on capital adequacy ratio is statistically insignificant and positive. "ïúòî*æ ­FtKj Ï»s6 Liquidity is a bank's capacity to fund increase in assets and meet both expected and unexpected cash and collateral obligations at reasonable cost and without incurring unacceptable losses. 01. Central Bank settled current liquidity ratio to commercial banks and it is calculated as ratio of liquid assets to up to one month maturity liabilities. The dependent variable is CAR. The study aims to examine the factors affecting corporate liquidity of steel listed firms in Vietnam over the time period from 2015 to 2020. On the other hand, average liquidity ratio (LIQ) of Nepalese non life insurance companies was found to be approximately one percent. the financial result is one of the factors affecting the market value of . Furthermore, Sopan J. jkns swuwwys tjjpy mdq gtrig oetwyit lceo kos uvllvo qepvfm