International Journal of Finance & Managerial Accounting

International Journal of Finance & Managerial Accounting

Stock liquidity and financial indicators of companies

Document Type : Review paper

Authors
Farshid Efati Baran 1
Yazdan Naghdi 2
Mahmood Mahmoodzadeh 3
Maryam Lashkarizadeh 4
1 PhD student of Economics in Firuzkooh, Islamic Azad University
2 Assistant Professor of Tehran Gharb, Islamic Azad University,
3 Associate Professor of Firouzkooh, Islamic Azad University
4 Assistant Professor of Tehran Gharb, Islamic Azad University
10.30495/ijfma.2023.73926.2031
Abstract
The purpose of this study is to investigate the effect of changes in the liquidity index of the shares of active companies in the Tehran Stock Exchange on the key financial indicators of those companies to explain the temporary exposure to liquidity risk. The liquidity of a stock sheet means the possibility of selling it quickly. It can be said that the faster and cheaper a share can be sold, the more liquid it is. Changes in the liquidity index of companies' shares can affect the financial performance of companies. In this study, the impact of stock liquidity on the financial indicators of companies active in the Tehran Stock Exchange during the years 1387-1400 was investigated in the form of a panel data model. The results of the estimation of the research models showed that the liquidity criterion has a significant effect on the amount of short-term debts of the companies at the rate of -1.15. Also, the liquidity criterion has a positive and significant effect on the amount of liquid assets of companies by 1.30. This measure of liquidity has a positive and significant effect on the amount of companies' assets by 1.53. The results of the research show that increasing the liquidity index of companies' shares can affect the short-term financial indicators of companies, including short-term liabilities and liquid assets.
Keywords
Liquidity
Stock Exchange
Financial indicators
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