Is liquidity associated to profitability? an analysis of the electricity industry in Iberia

This paper aims to clarify the relationship between Profitability and Liquidity in the Portuguese and Spanish Electricity industry, using univariate, bivariate, and multivariate statistics. The study is based on a sample of 76 companies, 38 from each country. Regarding the used measures, Return on A...

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Bibliographic Details
Main Author: Dona, Ricardo Francisco Montenegro (author)
Format: masterThesis
Language:eng
Published: 2022
Subjects:
Portugal
Financial statement analysis
Profitability
Spain
Liquidity
Domínio/Área Científica::Ciências Sociais::Economia e Gestão
Online Access:http://hdl.handle.net/10362/139924
Country:Portugal
Oai:oai:run.unl.pt:10362/139924
Description
Summary:This paper aims to clarify the relationship between Profitability and Liquidity in the Portuguese and Spanish Electricity industry, using univariate, bivariate, and multivariate statistics. The study is based on a sample of 76 companies, 38 from each country. Regarding the used measures, Return on Assets is the proxy of Profitability and Current Ratio, Quick Ratio, and Cash Ratio are the proxies of Liquidity. According to the results, a positive relationship between Profitability and Liquidity was found. Being the Cash Ratio the one with higher association, meaning that if managers want to increase ROA, increasing Cash Ratio will provide that result.

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