Liquidity as a Characteristic of Corporate Risk: Assessment Methods and Management Principles

The present article analyzes major works in the field of corporate liquidity management and substantiates the authors’ views of a systems approach to corporate liquidity management. Aim. The study aims to examine the fundamental principles of corporate liquidity management from the perspective of both preventing insolvency and providing some strategic insight regarding the effects of liquidity on company value. Tasks. The authors examine and analyze methods and indicators of corporate liquidity assessment as well as potential financial consequences of poor liquidity management. Moreover, they examine the sources of liquidity loss risk and establish some liquidity management principles. Methods. This study uses various aspects of general scientific methods of cognition to examine strategic aspects of corporate liquidity management, determine trends in the current state and development of such implemented policies, and identify basic principles. An econometric analysis of the relationship between the level of liquidity and profitability of assets based on 89 Russian companies shows a non-linear relationship and makes it possible to identify threshold points in the combined dynamics of liquidity and profitability, distinguishing between three ranges of positive and negative patterns throughout their interaction. Results. Implementation of the principle of correlation between liquidity management and the general corporate development strategy determines the need for a two-level liquidity management system within the framework of the company’s financial management. Depending on the general corporate strategy, companies adopt different policies (i.e., aggressive, conservative, moderate) relating to the level, structure, and funding of current assets, which collectively determine the liquidity level within a specified risk tolerance. Conclusion. The developed principles and the multi-layered approach to corporate liquidity management aimed at value creation expand the set of tools for comprehensive assessment and management of this key characteristic pertaining to the company’s activities in its financial management system.

risk, corporate liquidity and solvency, liquidity risk assessment, profitability, strategy, compromise between liquidity and profitability, риск, ликвидность и платежеспособность компании, оценка риска ликвидности, рентабельность, стратегия, компромисс «ликвидность , рентабельность»

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