CHALLENGES IN IMPROVING METHODOLOGIES FOR COMPANY LIQUIDITY ANALYSIS

Abstract

Abstract

This study refines and advances methodologies for analyzing corporate liquidity and solvency, addressing limitations in traditional approaches and proposing practical improvements to strengthen financial stability. Drawing on theoretical foundations and established practices in financial analysis, the research employs comparative, analytical, and factor-analysis techniques to evaluate liquidity ratios – absolute, intermediate, and current – and examines the influence of accounts receivable and payable structures on financial resilience. Findings demonstrate that conventional liquidity indicators alone are insufficient for a comprehensive assessment, highlighting the need for factor models and qualitative insights into asset and liability composition. The study further reveals that misclassification of certain components, such as investments in other companies’ shares or interfirm loans, can distort liquidity measures. The proposed methodology offers significant practical value for analysts and corporate managers by enhancing solvency assessment, optimizing cash-flow management, and mitigating financial risks. The originality of this work lies in its critical reassessment of classical liquidity analysis and its introduction of a factor-model-based approach that emphasizes the internal structure of balance sheet items, thereby contributing both to academic discourse and practical application.