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Cash Holdings, Working Capital and Firm Value: Evidence from France

Author

Listed:
  • Ruta Autukaite
  • Eric Molay

    (GRM - Groupe de Recherche en Management - EA 4711 - UNS - Université Nice Sophia Antipolis (1965 - 2019) - IAE Toulon - Institut d'Administration des Entreprises (IAE) - Toulon - UTLN - Université de Toulon)

Abstract

The importance of short-term financial decisions to a company's value is considered in this paper by testing whether an extra euro invested in cash or in net working capital is valued at less than one euro. By running panel data regressions, the presented evidence proves that shareholders undervalue cash holdings and net working capital. The results of this paper alert management not to underestimate the importance of cash holdings and working capital management; moreover, the results encourage investors to follow a company's actions in this area to maximise their returns on investment.

Suggested Citation

  • Ruta Autukaite & Eric Molay, 2014. "Cash Holdings, Working Capital and Firm Value: Evidence from France," Post-Print hal-02099766, HAL.
    • Handle: RePEc:hal:journl:hal-02099766
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    Cited by:

    1. Wetzel, Philipp & Hofmann, Erik, 2019. "Supply chain finance, financial constraints and corporate performance: An explorative network analysis and future research agenda," International Journal of Production Economics, Elsevier, vol. 216(C), pages 364-383.

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