Liquidity and Stability of Agricultur e in the Czech Republic

This article is based on empirical research and 2007–2012 statistical data from joint stock companies which were active in the agriculture sector of the Czech Republic. It deals with the wider aspects of liquidity and stability using suitable liquidity indicators and a vertical financial analysis over a sufficient period of time providing valid results for assessing liquidity and stability of agriculture in relation to cyclic fluctuations. The vertical financial analysis was performed to determine the liquidity structure at current assets and short term debts. Then convenient indicators of current ratio, quick ratio, and cash ratio were applied and interpreted in relation to cyclical deviations and agriculture specifics. From the viewpoint of liquidity measured using the current ratio, agriculture in the Czech Republic is stable and the current ratio values bear witness to solid liquidity, whereby the short-term assets exceed the short-term external funds. Research is to show whether the agriculture sector is liquid and whether the liquidity indicators provide the basis for solvency in the given field.