The Impact of Liquidity on the Profitability of a Listed Food Firms of Pakistan Stock Exchange

Author(s)

Ayaz Ahmed , Mohsin Lund , Muhammad Raheel Hisbani ,

Download Full PDF Pages: 52-70 | Views: 647 | Downloads: 125 | DOI: 10.5281/zenodo.5040546

Volume 10 - June 2021 (06)

Abstract

A definitive objective of each organization is to improve the abundance of the investors. For that reason, liquidity and productivity assume a fundamental part. This examination has an undertaking to know the impact of liquidity proportions on productivity, that what liquidity can mean for the benefit either emphatically or contrarily. The liquidity incorporates cash proportion, speedy proportion, and current proportion, which measure the association's efficiency and execution of return on resources. This examination has been directed on the information of 15 firms in the Food area of Pakistan from 2014 to 2019. The essential objective of the examination is choosing the effect of money proportion, current proportion, and speedy proportion on benefit (ROA). Also, these extents are the monetary devices to quantify the presentation and liquidity spot of firms. Further, it assists with realizing that organizations have stood, if pay, its momentary obligation. Likewise, it decides how firms can expand their benefit by putting resources into an alternate class. It utilizes viable methodology and arrangements to defeat the adverse aftereffects of a liquidity issue. In this exploration, optional information is utilized. The information of both liquidity and productivity proportions have been gathered from various sources, similar to the association's yearly budget summaries, joins, and different sources. Targets are accomplished through the investigation of gathered information by utilizing the fixed-impact (F.E) model and  arbitrary impact (R.E) model . Besides, the The optimal model between (RE) and (FE) was determined using the Hausman test. The Results acknowledge the utilization of the (FE) model for this investigation to dissect the impact of liquidity (fast proportion,present  proportion, and money proportion) on productivity to discover the negative or constructive outcome on a firm. They show the huge and immaterial relationship of liquidity factors to the productivity of Food enterprises. This investigation discovering introduced that unimportant and negative relationship of current proportion with return on resources, cash proportion adversely affects return on resources. The speedy proportion has a huge and positive relationship with return on resources.
Also, it is demonstrating that ceaseless advancement in the liquidity factors can prompt rising the benefit of Food enterprises. The discoveries recommend that organizations need to expand their exhibition and benefit by improving a company's monetary situation of liquidity and execution. The signs of the aftereffects of this exploration are that organizations ought to use their present resources at an ideal level to guarantee higher efficiency.

Keywords

Not Provided by Author

References

                    i            Aker, J. C, Boumnijel, R and McClelland, A and Tierney, N., (2016), Payment Mechanisms and Anti-Poverty Programs: Evidence from Mobile Money Cash Transfer Experiment in Niger, Economic Development and Cultural Change [Online] 65 (1), 1-51. Available from: DOI: 10.1086/687578 [Accessed on 17th May, 2021]

        ii            Akter, U., Anwar, S. M.R. and Mustafa, R. and Ali, Z., (2021). Revisiting the Impact of Mobile Banking in Financial Inclusion Among the Developing Countries .International Journal of Financial Research, [Online] 12 (2), 62-74. Available from: doi:10.5430/ijfr.v12n2p62 [Accessed on 5 May, 2021]

      iii            Abbasi, T. and Weigand, H. (2017) “The Impact of Digital Financial Services On Firms’ Performance: A Literature Review”, General Finance [Online] 1-15. Available from: arXiv:1705.10294 [Accessed on 6th May, 2021]

       iv            Afshan, S.and Sharif, A., (2016), Acceptance of Mobile Banking Framework in Pakistan, Telemetics and Informatics, [Online] 33 (2), 370-387. Available from: https://doi.org/10.1016/j.tele.2015.09.005 [Accessed on 6th May, 2021]

         v            Abbas, A., Khan, R., & Kanwal, S., (2019), Factors Affecting the Adoption of Mobile Banking in Pakistan, Global Scientific Journals, [Online] 7 (7) 425-436. Available from:  https://www.globalscientificjournal.com/ [Accessed on 3rd May, 2021]

       vi            Abbas, S.K., Hassan, H.A., Asif, J., Junaid, H.M., & Zainab, F., (2018), What Are the Key Determinants of Mobile Banking Adoption in Pakistan? International Journal of Scientific and Engineering Research, [Online] (2229-5518), 841-848. Available from: 10.14299/ijser.2018.02.012  [Accessed on 5th Nov 2020]

     vii            Bakri, M.H., (2020), Factors of Acceptance of Mobile Banking in Malaysia, International Journal of Human and Technology Interaction, [Online] 4 (2) 13-21. Available from: https://journal.utem.edu.my/ [Accessed on 14th April, 2021]

   viii            Chohan, M.A., Ramakrishnan, S., & Butt, S., (2017), An Economic Analysis of Mobile Banking in Pakistan, Journal of Applied Economics and Business Studies,  [Online] 1 (1), 31-38. Available from: 10.34260/jaebs.114 [Accessed on 7th, May, 2021]

       ix            De Reuver, M.,Verschuur, E., Nikayin. F.,  Narciso C., & Harry B., (2014), Collective Actions for Mobile Payment Platforms: A Case Study on Collaboration Issues Between Banks and Telecom Operators, Electronic Commerce Research and Applications [Online] 14 (5), 331-344. Available from: https://doi.org/10.1016/j.elerap.2014.08.004, [Accessed on 3rd, April, 2021]

         x            De Barros Ahrens, R.., Lirani, L.S. and Francisco, A.C., (2020). Construct Validity and Reliability of the Work Environment Assessment Instrument WE-10). International Journal of Environment Research and Public Health [Online] 17 (7364) 1-12 Available from: https://doi.org/10.3390/ijerph17207364 [Accessed on 8th May, 2021]

       xi            Frost, J. (2021) Statistics by Jim: Making Statistics Intuitive: STATISTICSBYJIM Available from: https://statisticsbyjim.com/ [Accessed 21st April 2021]

     xii            Feroze, A., and Basharat, A., (2011), Security Analysis of Mobile Banking Services in Pakistan, Asian Transactions on Fundamentals of Electronics, Communication and Multimedia, [Online] 1 (3), 13-17. Available from: https://www.researchgate.net/  [Accessed on 3rd April, 2021]

   xiii            Farah, M.F., Hasni, M.J.S., & Abbas, A.K., (2018), Mobile-banking adoption: empirical evidence from the banking sector of Pakistan, International Journal of Bank Marketing, [Online] (0265-2323) Available from: 10.1108/IJBM-10-2017-0215 [Accessed on 7th May 2021]

   xiv            Federal Reserve Bank of Boston. (2016), Mobile Banking and Payment Survey of New England Financial Institutions, New England Mobile Banking and Payments Survey Results Report, www.bostonfed.org

     xv            Hossain, M.A., and Ahmed, M.F. (2014),”Evaluating the impact of Mobile Banking Deployment for Microfinance Institutions”, D.U. Journal of Marketing [Online] 15, 144-157 Available from: https://www.semanticscholar.org/ [Accessed on 3rd Mar, 2021]

   xvi            Haider, M.J., Changchun, G., Akram, T., & Hussain, S.T., (2018), Exploring Gender Effects in Intention to Islamic Mobile Banking Adoption: An Empirical Study, Arab Economic and Business Journal, [Online] 25-38. Available from http://dx.doi.org/10.1016/j.aebj.2018.01.002 [Accessed on 9th May, 2021]

 xvii            Harelimana, J.B. (2017), Impact of Mobile Banking on Financial Performance of Unguka Microfinance Bank Ltd, Rwanda, Global Journal of Management and Business Research: C Finance [Online] 17 (6) 44-56 Available from: https://globaljournals.org/ [Accessed on 6th Feb, 2020]

xviii            Ifham, A. (2019), How to do Normality Test using SPSS: MEDIUM [Online] Available from: https://medium.com/ [Accessed 21st April 2021]

   xix            Iman, N., (2018), Is Mobile Payment Still Relevant in Fintech Era? Electronic Commerce and Research Applications, [Online] 30, 72-82. Available from: https://doi.org/10.1016/j.elerap.2018.05.009 [Accessed on 2nd Jan, 2021]

     xx            Ibrahim, M., Shahid, M.K., & Ahmad, S.F., (2015), the Impact of Innovations on Adoption of Mobile Banking in Pakistan, Fire Journal of Engineering and Technology, [Online] 1 (1), 14-24. Available from: www.firepubs.com [Accessed on 1 Jan, 2021]

   xxi            Ibrahim et, al., (2018), The Development of Technology Acceptance Model for Adoption of Mobile Banking in Pakistan, MAGNT Research Report, [Online] 3 (4), 97-109 Available from: 10.51380/gujr-36-02-06 [Accessed on 5 Feb, 2021]

 xxii            Karlan, D., Kendall, J. and Mann, R., Pande, R., Suri, T. and Zinman, J. (2016), “Research and Impact of Digital Finance”, National Bureau of Economic Research [Online]1-8. Available from: 10.3386/w22633 [Accessed on 3rd Dec, 2020]

xxiii            Kadhlwal, S., & Usman, M.A., (2007), Analysis of Mobile Payment Security Measures and Different Standards, Computer Frauds and Security, [Online] 2007 (6) 12-16 Available from: https://doi.org/10.1016/S1361-3723(07)70077-5 [Accessed on 4th Feb, 2020]

xxiv            Kanungo, R.P., & Gupta S., (2021), Financial Inclusion through Digitalization of Services for Well-being, Technological Forecasting and Social Change, [Online] 167 1-11, Available from: https://doi.org/10.1016/j.techfore.2021.120721 [Accessed on 7th, May, 2021]

  xxv            Karsen, M., Chandra, Y.U., and Juwitasary, H., (2019), Technological Factors of Mobile Payment: A Systematic Literature Review, 4th International Conference on Computer Science and Computational Intelligence 2019 (ICCSCI) 12–13 September 2019 Yogyakarta, Indonesia, Procedia Computer Science pp 489-498

xxvi            Lavrakas, P.J. (2008) Encyclopedia of survey research methods.[Online] Sage Publications, Inc., Thousand Oaks (Vols. 1-0) Available from: https://dx.doi.org/10.4135/9781412963947 [Accessed on 2nd Feb, 2021]

xxvii            Loaba, S. (2021), the Impact of Mobile Banking Services on Saving Behavior in West Africa, Global Finance Journal, [Online] 1-11 Available from: https://doi.org/10.1016/j.gfj.2021.100620 [Accessed on 7th, May, 2021]

xxviii            Mckinsey & Company, (2016) “Digital Finance for All: Powering Inclusive Growth in Emerging Economies”  Executive Summary Report  www.mckinsey.com

xxix            Miao, M. and Jayakar, K. (2016), “Mobile Payments in Japan, South Korea and China: Cross-Border convergence or divergence of business models?”), Telecommunication Policy 40 (2-3), 182-196 [Online] Available from: https://doi.org/10.1016/j.telpol.2015.11.011 [Accessed on 6th Nov, 2020]

  xxx            Mishra, V. & Bisht, S.S., (2013), Mobile Banking in Developing Economy: A Customer-Centric Model for Policy Formulation, Telecommunication Policy, [Online] 37 503-514, Available from: http://dx.doi.org/10.1016/j.telpol.2012.10.004 [Accessed on 7th, May, 2021]

xxxi            Malaquias, R.F., & Silva, A.F., (2020) Understanding the Use of Mobile Banking in Rural Areas of Brazil, Technology in Society, [Online] 62 1-9 Available from: https://doi.org/10.1016/j.techsoc.2020.101260 [Accessed on 7th, May, 2021]

xxxii            Pakistan Microfinance Review (2016), “Pakistan Microfinance Review 2016” Annual Assessment of Microfinance Industry https://pmn.org.pk/

xxxiii            N’dri, L.M., & Kakinaka, M., (2020), Financial Inclusion, Mobile Money, and Individual Welfare: The Case of Burkia Faso, Telecommunication Policy, [Online] 44 3 1-16, Available from:  https://doi.org/10.1016/j.telpol.2020.101926 [Accessed on 9th May, 2021]

xxxiv            Nabahat, S. (2014), Impact of Microfinance on Women Empowerment: A Case Study of Selected Districts of Khyber Pakhtunkhwa 1-162 [Online] Available from: http://prr.hec.gov.pk/ [Accessed on 14 Feb 2020]

xxxv            Obadeyi, J.A. Ogbeide, S.O & Akande, A.A (2020). Barriers of Microfinance Banks’ Credit Delivery to Small Enterprises: An Empirical Analysis from South-Western Nigeria. The Romanian Economic Journal, 78, 27-46

xxxvi            Ozili, P.K., (2018), Impact of Digital Finance on Financial Inclusion and Stability, Borsa Istanbul Review, [Online] 18 (4), 329-340 Available from: https://doi.org/10.1016/j.bir.2017.12.003 [Accessed on 3rd Feb 2020]

xxxvii            Rizvi, S.K.A., Naqvi, B. e and Tanveer, F. (2017) “Mobile Banking: A Potential Catalyst for Financial Inclusion and Growth in Pakistan”. The Lahore Journal of Economics [Online] 22 (Special Edition) 251-281 Available from: 10.35536/lje.2017.v22.isp.a11 [Accessed on 19th May, 2019]

xxxviii            Rizvi, S.K.A., Naqvi, B., and Tanveer, F. (2018) “Is Pakistan Ready to Embrace Fintech Innovation”, The Lahore Journal of Economics, [Online] 23 (2) 151-182. Available from: DOI: 10.35536/lje.2018.v23.i2.A6 [Accessed on 6th May, 2019]

xxxix            Saravanani, S. and Dharani, M. (2020) Development of a Frame Work for E-Banking Challenges In Rural India, Pramana Research Journal  [Online] 10 (2) 63-70 Available from: www.pramanaresearch.org [Accessed on 7th June 2020]

       xl            Shaikh, A.A. and Karjaluoto, H. (2016), Mobile Banking Adoption: A literature review, Telematics and Informatics, [Online] 32 (1), 129-142 Available from: https://doi.org/10.1016/j.tele.2014.05.003 [Accessed on 3rd Jan, 2020]

     xli            Shaikh, A.A., Glavee-Geo, R. & Karjaluoto, H., (2017), Exploring the Nexus between Financial Sector Reforms & the Emergence of Digital Banking Culture – Evidences from a Developing Country, Research in International Business and Finance, [Online] 42, 1030-1039. Available from: http://dx.doi.org/10.1016/j.ribaf.2017.07.039 [Accessed on 9th May, 2021]

   xlii            Shen, Y. C., Huang, C.Y., Chu, C. H., and Hsu, C. T. (2010), A benefit–cost perspective of the consumer adoption of the mobile banking system, Journal of Behaviour & Information Technology [Online] Vol 29, Issue; 5 497-511. Available from: https://doi.org/10.1080/01449290903490658 [Accessed on 4th April, 2021]

 xliii            Yussaivi, M.A., Syarief, M.E., and Suhartanto, D., (2021), Millennial Experience with Mobile Banking and Mobile Banking Artificial Intelligence: Evidence from Islamic Banking, International Journal of Applied Business Research [Online] 3 (1), 39-53. Available from: DOI: 10.35313/ijabr.v3i1.121 [Accessed on 4th Feb, 2021]

 xliv            Zhu, Q., Lyu, Z., Long, Y., & Wachenheim, C.J., (2021), Adoption of Mobile Banking in Rural China: Impact of Information Dissemination Channel, Socio-Economic Planning Sciences, [Online] 1-9. Available from: https://doi.org/10.1016/j.seps.2021.101011 [Accessed 9th May, 2021].

Cite this Article: