Abstract:
Purpose: The core purpose of the research was to evaluate the effect of liquidity
variations on the fix investment. To study the vigorous association between investment
and liquidity, we present a modest financing constraint into the investment technique.
This research study is performed with an objective to determine the role of working
capital management, its conceptual linkage to fixed investment indicators i.e.
fixed capital or to the additional of depreciated fixed capital. Furthermore; this aims to
investigate marginal impact of current ratio and working capital on equity ratio and fixed
assets in recession.
Research Methodology: In this research study longitudinal research approach has been
followed. The current research work is secondary in nature. The study is primarily
quantitative in nature. The data range selected for current study is consisted of 05 years in
time period with four different variables. In this research study internet resource is used
for data collection purpose. In this research study linear regression analysis has used as
regression technique to determine the impact of liquidity on selected independent
variables. In the study regression analysis was useful to examine the association between
liquidity and the fixed investment and equity ratio and current ratio made by cross
section of all the firms in the sector registered in Pakistan stock exchange. The research
based on financial data of oil and gas firms in recession period from 2005 to 2009 on
annually basis.
Findings: The findings of research are liquidity has major impact on the fix investment.
And current ratio has a significant impact on the equity ratio and working capital has
significant impact on fix investment.
