engleski

The Role of managers' perception in Liquidity management – Case of Croatia

Liquidity management is an important part of every business management. Managing optimal level of liquidity in order to service debts promptly is dependent on several features, such as the structure of assets, compatibility of assets to sources of assets, macroeconomic environment etc. Authors argue the impact of normal operating cycle, as average length of time between the acquisition of assets for processing and their realization in cash or cash equivalents, on company’s liquidity. The paper analyses the managers’ perception and expectation of turnover, production, inventory level and liquidity. Empirical analyses are conducted on the basis of the data set derived from Croatia’s Business Survey in manufacturing industry and in retail trade, conducted quarterly, in accordance with the harmonised EU Business Survey (BS) methodology, in the period 1995, III- 2013, III. Business surveys provide simple and up to date information available prior to official statistical data, used in explaining and forecasting changes in economy. Survey results are expressed as managers’ assessment and expectation about order books, export order books, finished goods, general business situation, turnover etc. Croatia’s Business survey has a variable liquidity added in questioner as specificity and a modification of the uniform EU business survey methodology. Consequent liquidity problem has been, since socialist times, one of the major problems for Croatia's business, and now in recession period it again represents the main difficulty for the Croatian economy. The aim of the paper is to investigate and quantitatively express the relationship between managers’ production assessments and expectations and their liquidity assessment. The results of the analysis showed that managers’ satisfaction level with liquidity was highly correlated with estimated level of turnover, business situation and finished goods (inventory level). Empirical survey results confirm forecasting power of BS results and contribute increasing the management awareness of business cycle impact on liquidity management.

Croatia; liquidity; manufacturing industry; perception; retail trade

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