In this way, the cash ratio
becomes a residual outcome of two opposite financial flows: on the one hand, the firm's cash flow and its applications; on the other, investment requirements and debt disbursements.
is cash and equivalents normalized by assets.
The mean of cash ratio
is 0.0782 with the minimum of 0.0027 and the maximum of 0.3396, implying that the cash level varies significantly among firms.
However, the average liquidity ratios (current ratio X8, quick ratio X9, cash ratio
X10) did not drop during the crises, which was partly due to abnormally high ratios in the cases of some companies,
Table 2: 2005-2008 Liquidity Ratios of Ak Enerji A.S AK ENERJI RATIOS 2005 2006 2007 2008 Current Ratio % 345 322 297 203 Liquidity Ratio % 200 251 254 187 Cash Ratio
% 173 215 154 91 Table 3: 2008-2013 Liquidity Ratios of Ak Enerji A.S.
In order to examine the Hypotheses 1, to wit, the relative-to-rivals cash level of a company has a positively correlation with its future product market share growth, this paper use all the annual firms-level samples to regress relative-to-industry sales revenue growth, relative-to-industry cash ratio
and other control variables (Size, Leverage and market-to-book ratio) though fixed effects model in equation (5).
The data in the second column show that all sponsors, except BMW, had a smaller cash ratio
than the average of their industry peers.
* Cash ratio
= Cash and Cash Equivalents/Current Liabilities;
The connection between employment and the cash ratio
is not led only by unexpected shocks.
The mean of the cash ratio
for each decade was 12.59 percent to 13.91 percent respectively (see Table 3, Panels A and B).
The large influx of oil revenues has aided banks in increasing the most liquid form of assets, cash, as the cash ratio
increased to 12.5 percent by the end of 2012, in comparison to 11.7 percent for 2011.
Henceforth, we focus on the cash ratio
, which is defined as the ratio of cash and equivalents to total assets: