The Moderating Effect of Size on the Relationship Between Liquidity Management and Sustainable Profitability: Evidence from BRICS Financial Firms

Foray Ansumana Bangali Tarawallie () and Murad Bein ()
Additional contact information
Foray Ansumana Bangali Tarawallie: Department of Business Administration, Faculty of Economics and Administrative Sciences, Cyprus International University, Lefkosa 99040, Cyprus
Murad Bein: Department of Accounting and Finance, Faculty of Economics and Administrative Sciences, Cyprus International University, Lefkosa 99040, Cyprus

Sustainability, 2025, vol. 17, issue 18, 1-22

Abstract: The aim of our research is to analyze the impact of size on the association between liquidity management and sustainable profitability of BRICS financial enterprises from 2000 to 2022. The analysis specifically focusing on banks listed on the BRICS stock market. This research investigated how the size of BRICS financial businesses affects the link between liquidity management (LR), return on assets (ROA), and Tobin’s Q. The research used two analytical techniques, namely GMM and Fully Modified Ordinary Least Squares (FMOLS), to assess the moderating impact of size on the association between liquidity and sustainable profitability. The study’s conclusions showed that the relationship between LR and profitability was statistically significantly impacted by size. Organizational scale plays a crucial role in shaping the dynamics of financial performance, as evidenced by the substantial positive moderating effect of size on the relationship between sustainable profitability and liquidity ratio. The LR evaluates a company’s ability to use liquid assets to meet short-term obligations, whereas sustainable profitability indicates how well BRICS financial firms generate profits by using their assets. Moreover, this analysis provides valuable information and assists bank management in making strategic choices. Enhancing their comprehension of the impact of size on the interplay between liquidity and profitability might enable managers to adopt more efficient financial strategies, thereby gaining a greater competitive advantage.

Keywords: sustainable; liquidity ratio; BRICS; Tobin’s Q; profitability; FMOLS (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/17/18/8128/pdf (application/pdf)
https://www.mdpi.com/2071-1050/17/18/8128/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:17:y:2025:i:18:p:8128-:d:1745882

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().