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Study On The Influence Of The Cash Conversion Cycle On The Financial Performance Of The Entity

Author

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  • PAVEL Ruxandra - Maria

    (Lucian Blaga University, Sibiu, Romania)

Abstract

The paper presents the impact of changes in the components of the cash conversion cycle on financial performance (expressed through economic profitability). The research sample consists of 26 companies belonging to the hotels and restaurants industry, listed on the Bucharest Stock Exchange, 2007-2016. The obtained results indicate that an increase in the debt recovery period and the inventory conversion period have the effect of diminishing the economic profitability of the companies included in the research. On the other hand, increasing the use of attracted resources leads to an improvement in financial performance at the company level in the period 2007-2016.

Suggested Citation

  • PAVEL Ruxandra - Maria, 2018. "Study On The Influence Of The Cash Conversion Cycle On The Financial Performance Of The Entity," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 70(2), pages 98-107, August.
    • Handle: RePEc:blg:reveco:v:70:y:2018:i:2:p:98-107
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    File URL: http://economice.ulbsibiu.ro/revista.economica/archive/70209pavel.pdf
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    More about this item

    Keywords

    return on total assets; cash conversion cycle; receivables collection period; payables deferral period; multiple linear regression;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General

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