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The main aim of the paper is to determine the relationship between profitability and financial liquidity of a company using meta-analysis. This method is based on a synthesis of many previous studies with the application of econometric tools. The results of the study show that, taking into account 16 economies, it is not possible to identify a common effect describing the relationship between the profitability of enterprises and their financial liquidity measured by the current liquidity ratio. The results of individual empirical studies that underlie the meta-analysis are diverse. This means that there are moderators of the strength and direction of this dependence associated with macroeconomic and institutional conditions. We attempted to separate them by means of meta-regression. This method involves the use of a regression model, where data are derived from both meta-analysis and external sources. We diagnosed two statistically significant moderators of the strength and direction of the relationship between profitability and liquidity. These are two factors: (i) private sector crediting and (ii) capital market development. Our paper contributes to the development of the existing knowledge by summarizing and binding previous individual empirical studies on the relationship between profitability and liquidity of enterprises and identifying factors affecting this relationship. This knowledge can assist financial managers in making more efficient decisions related to liquidity and working capital management.

Meta-study on the relationship between profitability and liquidity of enterprises in macroeconomic and institutional environment