STUDY ON THE INFLUENCE OF THE CASH CONVERSION CYCLE ON THE FINANCIAL PERFORMANCE OF THE ENTITY

Ruxandra - Maria Pavel
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Ruxandra - Maria Pavel: Lucian Blaga University, Sibiu, Romania

Revista Economica, 2018, vol. 70, issue 2, 98-107

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.

Keywords: return on total assets; cash conversion cycle; receivables collection period; payables deferral period; multiple linear regression (search for similar items in EconPapers)
JEL-codes: C12 G32 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:blg:reveco:v:70:y:2018:i:2:p:98-107

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