The Impact of Debt Funding Sources on Liquidity of Companies in Food Industry

DOI 10.7160/aol.2019.110309
No 3/2019, September
pp. 91-104

Šeligová, M. and Koštuříková, I. (2019) “The Impact of Debt Funding Sources on Liquidity of Companies in Food Industry", AGRIS on-line Papers in Economics and Informatics, Vol. 11, No. 3, pp. 91-104. ISSN 1804-1930. DOI 10.7160/aol.2019.110309.


The aim of this article is to determine the impact of debt funding sources structure on liquidity of companies in food industry in the Czech Republic from 2006 to 2016. With the purpose to fulfill the aim, we examine existence and character of relationship between the debt funding sources structure (long-term loans, short-term loans, other long-term liabilities, other short-term liabilities, debt equity ratio) and liquidity of the companies (cash ratio, quick ratio and current ratio) in food industry in the Czech Republic. The relationship between debt funding sources structure and liquidity of companies is tested through correlation analysis, Granger causality test and generalized method of moments (GMM). The liquidity of companies was positively influenced by the long-term loans in companies (cash ratio and quick ratio) in food industry in the Czech Republic. The results also indicate that there is the negative impact of other current liabilities on liquidity of companies (cash ratio, quick ratio and current liquidity) in food industry in the Czech Republic.


Debt funding sources, generalized method of moments, Granger causality test, liquidity, long-term bank loans.


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