ABSTRACT
Purpose: The purpose of the study is to detect the liquidity level of the seven companies with the highest trading volumes registered in the Polish Stock Exchange and measure the liquidity performance. The secondary purpose of the research is to determine the impact of liquidity level on return on assets (ROA), return on equity (ROE), and return on capital (ROC). As a result of the research, financial failure situations were presented by considering the Altman Z Score of the enterprises and the study was completed.
Design and Methodology: Today, businesses frequently experience cash needs. To detect such a problem, the liquidity ratios, which are the financial ratios of enterprises, should be calculated. These calculations were made through the financial statements of the companies, and a five-year dataset covering the years 2018–2022 was used. The sample used in the study consisted of the seven enterprises with the highest trading volumes registered in the Polish Stock Exchange. The methods used in the research were Multi-Criteria Decision Making Methods. These methods were categorized into two groups. The importance level of the liquidity ratios used with the weighting methods, as the first group, was determined and the liquidity performances of 12 enterprises were compared with the performance ratios, as the second group.
Findings: In the research, the liquidity performances of seven companies in Poland were determined by using Excel Software, and the criterion weights of financial indicators were determined by the SD Method. With the MAIRCA Method, the liquidity performance success ranking was made over the years.
Discussion: The liquidity statuses of the enterprises are quite important in regulating the cash flow of the enterprises and calculating the short-term resource needs. The liquidity ratios were used to measure the liquidity level. After determining the liquidity levels, the effects of ROA, ROE, ROC, and financial failure scores on the liquidity level were determined.
Research Limitations: The data obtained from seven companies with high transaction volume registered in the Polish Stock Exchange over the period 2018–2022 were used in the research; the data of nine enterprises registered on the stock exchange belong to the last five years, or in other words, the access to the data is limited to this dataset. The results obtained from the research; it is limited to five years, three criteria, and applied methods. In order to generalize the results, it is necessary to support the research by analyzing different economic data of Poland with different mathematical, statistical, and econometric methods.
Originality: This study is different from other research studies that focus on economic forecasting and modeling, which requires expertise such as economics, statistics, and econometrics and can be easily done by means of computer technologies. It is aimed to give in detail how the liquidity performance of the companies in Poland for the last five years is calculated with the help of Excel Software of SD and MAIRCA Analysis, with the help of formulation. Thus, unlike the literature available on this subject, it is aimed to calculate the liquidity level, measure the impact of profitability ratios on liquidity, and calculate and interpret financial failure scores via Altman Z Score as a result of this effect. This research would contribute to the literature with this aspect.
