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|Title:||Effects of Liquidity Crisis on Financial Performance of Firms Listed on the Zimbabwe Stock Exchange|
Zimbabwe Stock Exchange
|Publisher:||Lupane State University|
|Abstract:||The Zimbabwean economic development has been affected by a liquidity crisis that has been affecting the country since 2009 after the multicurrency system was introduced. This research is aimed at establishing the effects of liquidity crisis on financial performance of firms listed on the Zimbabwe Stock Exchange. The study used secondary data from the published financial statements for the period 2012 to 2016. A descriptive research design was used. Qualitative data was gathered and analyzed using correlation analysis and regression analysis. The hypothesis was tested using SPSS AMOS, and a path model which determined the strength of the indirect and direct influence between the variables was generated using SPSS AMOS. Liquidity crisis was measured using balance sheet liquidity as well as macro-economic factors and financial performance was measured using return on equity. It was found that liquidity crisis negatively affects the financial performance of firms listed on the Zimbabwe Stock Exchange. The current ratio was found to have a positive effect on financial performance measured using return on equity. It was found that liquidity crisis negatively affects the financial performance and the debt to equity a negative one while gross domestic product was found to have a positive relationship which led to the conclusion by the study that liquidity crisis has a negative effect on financial performance. The study recommends that firms listed on the Zimbabwe Stock Exchange should focus on increasing their liquidity so as to attain full performance, also reduce debt as a way of finance during this liquidity crisis since interest rates are high and reduce debt as a way of finance during this liquidity crisis since interest rates are high and it also recommends that the government should focus on activities that increase the gross domestic product of the country and also increase their focus on ways to attract foreign direct investments as a way of increasing the financial performance of listed firms|
|Appears in Collections:||Department of Accounting and Finance|
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