Iluta Arbidane, Elvira Zelgalve


In order to ensure the financial sustainability of companies under current economic conditions successful management of current assets is crucial. In practice it is quite often observed that the decisions of current assets management in companies are made in the short-term aspects not making analysis. The aim of the article is to explore and analyse the structure of current assets and their indicators in business in Latvia. In order to reach the aim the author solves the following tasks in the research: to explore and analyse the structure of current assets, its changes and trends in the companies of Latvia; to perform calculations and analysis of the indicators characterizing the effectiveness of current assets;  basing on the analysis to evaluate the development tendencies of the structure and indicators of current assets at various stages of economic development and to determine the correlations between these indicators. The research is based on the data obtained by the Central Statistics Bureau. The research covers the period of 1995–2010. The research is based on the analysis and evaluation of special literature and scientific publications about current assets management; research involves the use of generally accepted economic and statistical analysis methods, logically-constructive method of qualitative research methods: monographic method, Latvian and foreign industry literature, legislation content analysis, quantitative research methods: economic statistics and financial analysis techniques using Microsoft Excel software, data graphical  display techniques. The article is focused on the exploration and analysis of the Latvian statistical data describing the amount, structure of current assets in business and its changes at various stages of economic development. Performing the analysis of current assets in the national economy of Latvia in general there are calculated and analysed various indicators, for example, liquidity, turnover of current assets, working capital. The research does not deal with the analysis of current assets in the aspect of branches. The calculations let estimate the changes of these indicators and their correlations as well as trends in the companies of Latvia. The current assets of companies in Latvia, their structure and indicators to a large extent are influenced by the economic situation in Latvia. Under conditions of a stable and flourishing economic situation companies have stable development indicating balanced increase of financial indicators. Upon increase of net turnover the amount of current assets also increases. When the national economy and business indicators improve, the proportion of assets flexibly reacts by increasing the proportion of current assets in the total structure of assets. However, when business activity decreases, the proportion of assets in the total structure of assets reduces. As a result of analysis there can be observed a correlation that the amount of stock and debts of debtors are interrelated with the net turnover of companies. The dynamics of cash and short-term securities shows that in the economic recession period it even increases. The economic situation in the state does not change very significantly the indicators of the current assets structure. Slight changes in the proportion of stock and cash prove that under condition of recession the managerial staff of Latvian companies pays attention to introduction of effective current assets management. The changes of current assets and their decrease in the recession period indicate that economic processes influence this indicator. The analysis of liquidity indicators did not reflect significant correlation between economy and changes of these indicators; however, the companies of Latvia typically do not have high liquidity indicators which shows some problems, but which cannot be identified not knowing certain conditions. The analysis of the structure and indicators of current assets using a maximally longer period of time enables to make timely and effective managerial decisions.



current assets; working capital; structure of assets; efficiency

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Print ISSN: 1822-8402
Online ISSN: 2335-8831