This article summarises the findings of research undertaken in the Bank into the factors underlying the short-term financial behaviour of some 700 UK-based companies. Information about these companies was taken from their published accounts and was used to model their decisions about, for example, appropriate levels of bank borrowing or holdings of bank deposits and other liquid assets. The reasons for undertaking this research, the approach adopted in modelling short-term financial behaviour and some of the findings are briefly discussed.
Companies' short-term financial decisions