TY  - JOUR
AB  - This study empirically examines the relation between profitability and liquidity, as measured by current ratio and cash gap (cash conversion cycle) on a sample of joint stock companies in Saudi Arabia. Using correlation and regression analysis the study found significant negative relation between the firm’s profitability and its liquidity level, as measured by current ratio. This relationship is more evident in firms with high current ratios and longer cash conversion cycles. At the industry level, however, the study found that the cash conversion cycle or the cash gap is of more importance as a measure of liquidity than current ratio that affects profitability. The size variable is also found to have significant effect on profitability at the industry level. Finally, the results are stable over the period under study.
VL  - 14
IS  - 2
SN  - 1056-9219
DO  - 10.1108/10569210480000179
UR  - https://doi.org/10.1108/10569210480000179
AU  - Eljelly Abuzar M.A.
PY  - 2004
Y1  - 2004/01/01
TI  - Liquidity ‐ profitability tradeoff: An empirical investigation in an emerging market
T2  - International Journal of Commerce and Management
PB  - Emerald Group Publishing Limited
SP  - 48
EP  - 61
Y2  - 2024/04/16
ER  -