Is the Cash Conversion Cycle A Return Predictive Signal?
Seidman College of Business
The purpose of this research is to measure if the cash conversion cycle (CCC) of a firm is identifiable as a return predictive signal (RPS). Current published research has identified more than 330 signals (Green, Hand and Zhang, forthcoming 2013). Our research will examine the impact of inventory, accounts receivable and account payable have on stock returns of publicly traded firms. The unit for the CCC is in days per year, with the specific components of days of sales in inventory (DSI) plus the average collection period (ACP) minus the average payables period (APP). The lower (higher) the CCC, the more (less) efficient the company is in managing the working capital. We have begun the process of collecting the firm-specific data from the Research Insight database.
SOBIE 2014 Annual Conference
Willey, Thomas E. and Edwards, Susan, "Is the Cash Conversion Cycle A Return Predictive Signal?" (2014). Faculty Scholarly Dissemination Grants. 697.