LIQUIDITY MANAGEMENT AND CORPORATE RISK

Abstract

The consequence of the economic crisis, the access of the external financing resources was narrowed significantly and lenders had became more cautious. This meant that the external source providers analyze more thoroughly the source claimants, and they also need to be more aware of their situation, to submit well founded loan applications to financial institutions. The other aspect is why the indicators presented in the study, the firms should be addressed much more thoroughly than ever before to have a much better understanding their situation, to recognize the sources of internal funding opportunities, and to use more efficiently the available internal resources. However, analysts should be aware of which are the ratios which should be paid a special attention and which ones are essential to assess a given situation, knowing them they can properly inform the leaders as well as to give an appropriate help to the decision makers. \\\\\\\\r\\\\\\\\nTo ensure the appropriate level of internal resources the company\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s activity is continuous financing closely related to the working capital management. The other reason is why the working capital management coming into view - which is linked to the previous one - that longer and longer payment periods have emerged in the corporate sales, in point of fact there is a significant increase in commercial lending period, the companies must be able to finance this period. The working capital is essential for companies to determine their short-term financial positions. A significant change in working capital provides an important information to the company\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s various stakeholders, and this is especially true for the net working capital. The working capital analysis is one way the company\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s creditability evaluation, and helps also to better understand the company\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s normal business cycle.liquidity management, risk assessment, liquidity ratios, comprehensive liquidity index, cash conversion cycle