Profitability – Financial Liquidity Relation under Bank Dependence During the Financial Crisis. Case of Polish Companies
Profitability – Financial Liquidity Relation under Bank Dependence During the Financial Crisis. Case of Polish Companies

Summary/Abstract: The aim of the paper is to find the impact of financial crisis on profitability, financial liquidity, and on the relation between profitability and financial liquidity. We did it by including additional dimension: companies’ dependence on bank financing (companies that rely and do not rely on the bank financing). Our analysis covers the country that was perceived as resistant one to financial crisis – Poland. The analysis was conducted for panel sample of 183 companies listed on Warsaw Stock Exchange for the period of 2005-2016 (8,784 quarter-company observations). We found that Polish companies seem to be quite robust to the financial crisis impact in general. The strongest impact of financial crisis was on turnover ratios – DIO and DPO increased during and after financial crisis. As for companies with low and high bank dependence we found that high bank dependent companies underwent the financial crisis more heavily – their profitability and financial liquidity decreased radically during financial crisis time but also after financial crisis (in the short and long-term).

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