Cash conversion cycle and corporate performance: Global evidence

Chang, Chong-Chuo

doi:10.1016/j.iref.2017.12.014

Cited by 81 publications

(89 citation statements)

References 62 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…In addition, firms may be forced to draw capital away from alternative value-enhancing projects if they have too much capital tied up in working capital positions (opportunity costs) (Deloof, 2003;Baños-Caballero et al, 2014). This traditional view of WCM has received further support from the studies of García-Teruel and Martínez-Solano (2007), Autukaite and Molay (2014), Zeidan and Shapir (2017) and Chang (2018).…”

Section: Traditional Wcm School Of Thoughtmentioning

confidence: 99%

Supply chain finance, financial constraints and corporate performance: An explorative network analysis and future research agenda

Wetzel

Hofmann

2019

International Journal of Production Economics

View full text Add to dashboard Cite

In this paper, we examine the functional form of the relationship between working capital assets and corporate performance beyond the traditional single-company perspective. In particular, we explore how a focal company's adequate level of working capital is influenced by the presence of limited financial resources along the supply chain. Moreover, we investigate the performance impact of supply chain finance (SCF)-oriented working capital management (WCM) approaches. Based on the SCF-oriented school of thought, we subject propositions regarding the relationship between working capital and corporate performance from prior WCM research to explorative empirical testing. In doing so, we raise awareness of factors that have yet to be tested. We derive methodological implications for conducting interorganizational studies in the field of SCF and outline a future research agenda. The explorative results indicate (i) the existence of a profit-maximizing level of working capital, (ii) superior performance of companies adopting an SCF-oriented WCM approach, (iii) higher profitmaximizing levels of working capital for focal companies facing financially constrained supply chain partners, (iv) a positive performance impact of efficient inventory management, and (v) differentiated payment strategies toward up-and downstream supply chain partners.

show abstract

Section: Traditional Wcm School Of Thoughtmentioning

confidence: 99%

Supply chain finance, financial constraints and corporate performance: An explorative network analysis and future research agenda

Wetzel

Hofmann

2019

International Journal of Production Economics

View full text Add to dashboard Cite

show abstract

“…Similar studies have been done on different industries and in different countries, such as the manufacturing sector in Malaysia (Jakpar et al, 2017), the small and medium-sized companies in Italy (Muscettola, 2014), Indian automobile firms (Vijayakumar, 2011), and a listed company in Brazil (Zeidan & Shapir, 2017). For a more comprehensive review of evaluating the impact of cash conversion cycle on firm performance, please see Lin et al (2016) and Chang (2018). While these studies treat the cash conversion cycle as an independent variable, the formulas to calculate the three periods are not consistent.…”

Section: Related Workmentioning

confidence: 99%

Cash Conversion Cycle: Which One and Does It Matter?

Tan

Tuluca

2019

ijafr

View full text Add to dashboard Cite

In the present study, we attempt to investigate the information validity of an important financial metric, the cash conversion cycle (CCC.) A survey of scholarly papers and textbooks reveals that multiple methods to compute the CCC components are employed. Based on a relatively large dataset for six public companies, we explore two of the different methods and their effect on the resulting CCC value. We find that the means of the time series of the two methods over 20 years have only mild statistically significant differences. However, there are important differences in several annual periods for some of the firms analyzed. Since financial managers and financial analysts use the CCC for decision-making, analysis and valuation purposes, the findings of this research represent a warning that the CCC computations might not yield reliable conclusions, as they are dependent on the input used in the calculations.

show abstract

“…However, the problem of liquidity management in relation to business performance is much less investigated. (Chang, 2018) Chang (2018) examines the Cash Conversion Cycle (CCC) and its impact on global performance. There is a statistically significant negative relationship between the CCC and the return on assets of the total invested capital.…”

Section: Literature Reviewmentioning

confidence: 99%

“…In particular, the fact that the existence of net working capital means lower risk is also highlighted, and they are also associated with lower returns than is the case for investment assets. Endogeneity is also taken into an account with by Chang (2018). Just as the claim that lower working capital is associated with higher profits, the claim that higher profits are associated with a lower rate of net working capital, and vice versa.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Insolvency of a company is directly connected to its profitability, liquidity, or even working capital. Although working capital management is vital because of its impact on the firm's profitability and risk, and consequently its value, it has received less attention than to capital budgeting, capital structure, or dividend policy among the literature (Chang, 2018). Current paper therefore focuses on working capital management.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

What Drives Liquidity of Tourism Companies? Microeconomic Evidence from Bulgaria, Czech Republic and Poland

Heryán¹

2018

Acta Univ. Agric. Silvic. Mendelianae Brun.

View full text Add to dashboard Cite

Current paper focuses on business economics of tourism industry. Liquidity of a company has the key role within financial management among all industries, including the tourism as well. However, the question still remains: What drives the liquidity among hotels and travel agencies? The aim of the paper is to investigate whether or not is the liquidity among tourism companies in Bulgaria, Czech Republic and Poland affected by other selected microeconomic variables. It is obtained financial data from annual reports of 1,892 tourism companies collected within Amadeus, the international statistical database. Estimated period is from 2006 till 2015. In particular it has been explored three variables (i) return on assets, (ii) share of stockholders’ funds, and (iii) average length of loans from creditors. As the main estimation method is employed the Generalized Method of Moments (GMM) with panel data. A comparison is made between both, large as well as medium sized hotels and travel agencies in selected countries. Except of a few, it was proven that reinvestments of the decreasing profit supported liquidity among tourism companies during a period affected by the global financial crisis.

show abstract

Cash conversion cycle and corporate performance: Global evidence

Cited by 81 publications

References 62 publications

Supply chain finance, financial constraints and corporate performance: An explorative network analysis and future research agenda

Supply chain finance, financial constraints and corporate performance: An explorative network analysis and future research agenda

Cash Conversion Cycle: Which One and Does It Matter?

What Drives Liquidity of Tourism Companies? Microeconomic Evidence from Bulgaria, Czech Republic and Poland

Contact Info

Product

Resources

About