Financial liquidity and profitability of family farms – interdependence dilemma
Financial liquidity and profitability of family farms – interdependence dilemma

Summary/Abstract: The study was to analyse correlations between liquidity according to the dynamic and static approach and profitability. Liquidity has been evaluated using the financial liquidity ratio and quick liquidity ratio. Profitability has been measured with the use of return on assets ratio. The study covered 679 farms which in the period between 2004 and 2011 gathered accounting data for FADN PL purposes. The study has shown a statistically significant correlation between the liquidity ratio in the dynamic approach and ROA. However, it was not possible to confirm explicitly if such a correlation has been positive (low correlation coefficients).

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