Michalski, Grzegorz Marek, Liquidity or Profitability: Financial Effectivness of Investments in Working Capital (June 25, 2008). INTERNATIONAL FINANCIAL SYSTEMS, P. Cervinek, ed., BRNO, 2008. Available at SSRN: http://ssrn.com/abstract=1299586

Liquidity or Profitability: Financial Effectivness of Investments in Working Capital

Grzegorz Michalski

Wroclaw University of Economics

INTERNATIONAL FINANCIAL SYSTEMS, P. Cervinek, ed., BRNO, 2008

Abstract:
The basic financial purpose of corporation is creation of its value. Liquidity management should also contribute to realization of this fundamental aim. Many of the current asset management models that are found in financial management literature assume book profit maximization as the basic financial purpose. These book profit-based models could be lacking in what relates to another aim (i.e., maximization of enterprise value). The corporate value maximization strategy is executed with a focus on risk and uncertainty. This article presents the discussion about relations between firm's net working investment policy and firms value.

Number of Pages in PDF File: 14

Keywords: corporate value, investments, current assets, working capital, value based management

JEL Classifications: D81

Accepted Paper Series

Date posted: November 11, 2008 ; Last revised: January 03, 2009

Suggested Citation

Contact Information

Grzegorz Marek Michalski (Contact Author)

Wroclaw University of Economics ( email )

Komandorska Street 118/120, p. Z-1, KFPiZW
Department of Corporate Finance & Value Management
Wroclaw , Lower Silesia 53-345
Poland
0048503452860 (Phone)
0048717181717 (Fax)

HOME PAGE: http://michalskig.ae.wroc.pl/

Liquidity or Profitability: Financial Effectivness of Investments in Working Capital | Hide Abstract | Download |
INTERNATIONAL FINANCIAL SYSTEMS, P. Cervinek, ed., BRNO, 2008
Accepted Paper Series

Grzegorz Marek Michalski

Wroclaw University of Economics

Posted:

11 Nov 08

Last Revised:

03 Jan 09

988
(6,298)

Abstract:
The basic financial purpose of corporation is creation of its value. Liquidity management should also contribute to realization of this fundamental aim. Many of the current asset management models that are found in financial management literature assume book profit maximization as the basic financial purpose. These book profit-based models could be lacking in what relates to another aim (i.e., maximization of enterprise value). The corporate value maximization strategy is executed with a focus on risk and uncertainty. This article presents the discussion about relations between firm's net working investment policy and firms value.

corporate value, investments, current assets, working capital, value based management