The Relationships between Supply Chain Capability and Shareholder Value Using Financial Performance Indicators

Seock-Jin Hong and Hossein Najmi
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Seock-Jin Hong: Department of Marketing, Logistics and Operations Management, G. Brint Ryan College of Business, University of North Texas, Denton, TX 76203, USA
Hossein Najmi: Department of Information Systems and Operations Management, College of Business, University of Central Oklahoma, Edmond, OK 73034, USA

Sustainability, 2020, vol. 12, issue 8, 1-16

Abstract: The purpose of this paper is to explore which financial performance indicators (FPIs) evaluate the level of supply chain capability (SCC) that explicitly touches all of the business functions and processes within and beyond the company. The authors investigated nine FPIs that were selected from the financial statements of 155 companies within nine industries from 2011 to 2017 using Morningstar financial database and Gartner’s report. The authors find that suitable FPIs to measure SCC for shareholders’ value are return-on-assets (ROA), days-sales-outstanding (DSO), and current ratio (CR). This means that higher ROA, shortened DSO, and an appropriate level of CR could reach a sustainable supply chain. These results will help the industry to avert a major disruption in supply chain processes and activities using suitable financial performance indicators.

Keywords: shareholder value; return-on-asset; days-sales-outstanding; current ratio; supply chain capability; sustainable supply chain (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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