A comparison on the long-term indebtedness and liquidity dynamics with the levels of bank credits usage

The levels of being indebted for the businesses affect their liquidity in terms of their ability for short term repaying. The level of existing liquidity for the firms is among the important determinants of the ability to have debts in the future as well. This study explores the relationship in between long-term indebtedness and short-term financing tendencies along with the liquidity dynamics of the businesses in the health sector in Turkey. Liquidity levels of the firms are generally effective only on the preferences of having debt in the close future. This study, however, asserts that both short and long-term accumulation of debt levels significantly affect the firms' liquidity levels as well in the case of health sector. After the analysis of the sectoral data used in the study as three year averages, the ratio of short-term bank credits on short-term liabilities and the ratio bank credits on liabilities are both significantly and statistically effective on the level of liquidity or acid-test ratio of the firms for the long run in the heath sector. The findings and the results of the study will expectedly be helpful on the issues of having debts and short-term liquidity supervision for the decision makers in the financial management of the firms in the health sector.