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ANALYSIS OF LIQUIDITY RISK AS A FACTOR OF BUSINESS SUCCESS OF MICRO, SMALL AND MEDIUM-SIZED ENTERPRISES IN THE REPUBLIC OF CROATIA

Authors :
Vinšalek Stipić, Valentina
Arbanas, Ivana
Crnković, B.
Publication Year :
2023

Abstract

Settlement of financial obligations on time and timely collection of receivables are fundamental prerequisites for the liquidity and solvency of companies, as well as the development of entrepreneurship and the economy. By harmonizing the terms of collection of receivables and the terms of payment of liabilities, companies try to avoid a positive cash gap. Liquidity risk analysis for micro, small and medium-sized companies is an important factor in successful business. The analysis of liquidity risk by individual activities of the company provides information that enables more efficient management of the company to achieve profitability. Often, owners of micro, small and medium-sized enterprises are not aware of the importance of implementing financial and accounting analyzes as an important factor in achieving business success. A review of the available scientific and professional literature for the Republic of Croatia reveals the insufficiency of sources, which is also confirmed by the insufficient research on the mentioned topic. In accordance with the above, the aim of this paper is to prove the importance of liquidity risk analysis for achieving profitability of micro, small and medium-sized enterprises in the Republic of Croatia. This research will conduct a comparative analysis of the correlation and regression of liquidity risk factors and business performance indicators in order to prove that the continuous implementation of liquidity risk analysis is extremely important for the success of micro, small and medium-sized companies. The research is conducted on a sample of 254 micro, small and medium-sized Croatian companies. The scientific contribution of the work is to prove the connection between liquidity risk analysis and profitability of micro, small and medium-sized enterprises, which should cause greater interest of entrepreneurs in implementing liquidity risk analysis in practice.

Details

Language :
English
Database :
OpenAIRE
Accession number :
edsair.57a035e5b1ae..92cb2ed83c2999c7b6a82e2bbeb8b758