1、中文 2653 字 外文翻译 原文 The Cash Flow Implications of Managing Working Capital and Capital Investment Material Source: Journal of Business & Economic Studies Author: Russell P. Boisjoly INTRODUCTION In recent years major corporations have discovered that there are important cash flow streams available to
2、them if they aggressively manage their working capital accounts (accounts receivable, inventory, accounts payable, and advance payments).While some have argued that cash flows generated through working capital management (improving inventory turnover, aggressive accounts receivable collection polici
3、es or supplier management programs, lengthening accounts payable payment periods, etc.) are transitory and, therefore, are not indicative of a fundamental improvement in the internal value creation process (business model), there is limited empirical evidence on whether these practices (a) have chan
4、ged the underlying probability distributions of the related financial ratios, (b) persisted over several years rather than just 2 or 3 years as implied by Mulford and Ely who purport that changes are transitory or temporary, (c) whether these changes in working capital management policies have impac
5、ted market values positively (or negatively) or (d) whether we understand the model for cash flows through the firm adequately to properly conduct empirical tests or forecast cash flows. In addition to managerial policies, one should probably consider changes in technology and changes in the financi
6、al environment. Typical DSO or ACP ratios have been radically lowered for most merchandisers by the nearly universal outsourcing of the credit function to credit card companies. Also, the decline of short-term interest rates most certainly affected WC policies during the period in question, making f
7、irms less willing to hold cash, and perhaps more willing to increase short-term liabilities. This issue is important to examine not only to determine if changes in management practices have impacted cash flow and value creation, but also to investigate whether ratio norms may have changed and shifte
8、d the benchmarks for comparisons between firms. Furthermore, these benchmarks are derived from the measures of central tendency, but the appropriate use of these benchmarks may be influenced (or biased) by the third (skewness) and fourth (kurtosis) moments of the ratio distributions or industry effe
9、cts or financial condition. If the bias exists and if the skewness is significant, then the appropriate benchmarks may deviate significantly from the mean, median, or mode. In the past, some researchers excluded “outliers,” e.g., introduced by skewness, from their studies because they were responsib
10、le for departures from normality, or they made square root or logarithmic transformations to the data to reestablish or more nearly approach normality. These adjustments theoretically would leave the “benchmarks” unaltered. But, there is substantial evidence the distributions of financial ratios exh
11、ibit positive skewness. Previous studies show that distributions of financial ratios exhibit positive skewness and departures from normality. However there have been no attempts to explain the source of the skewness. If management has engaged in practices that should attenuate mean deviations, skewn
12、ess, or kurtosis, then there may be evidence of this that can be discovered by following firms over time. If distributions have shifted (mean, variance, skewness, and/or kurtosis), then a longitudinal investigation may lead to the establishment of new benchmarks or a new benchmark measurement proces
13、s, as well as examine the impact on stock price performance.Also, if evidence exists for ratio distribution shifts, then there is cause to reexamine the value creation process and the causality of cash flow generation to value creation. Therefore,the starting point is this longitudinal study of an o
14、riginal sample of 50 firms to determine if distributions have shifted due to changes in working capital management and corporate reinvestment policies. HYPOTHESIS FORMULATION This study will look at the distributional properties of several financial ratios tied to the working capital management and
15、capital investment processes of the firm. We will investigate whether there is evidence to support the acceptance of the hypotheses that corporations, especially the largest firms, have become more vigorous in managing their working capital processes or capital investment practices to generate signi
16、ficant improvements in cash flow. Specifically, corporations may have improved the management of accounts receivable, inventory, accounts payable, and advance payments to such an extent that distributions of the related financial ratios have shifted significantly. The distributions also may be more
17、skewed as a result of these changes in corporate policy to accelerate customer payments or extend the period taken to pay suppliers. In addition, corporations may have reduced their reinvestment in the firm as a result of productivity improvements that have been achieved over the last 15 years. The
18、reduction in capital investment may have improved the cash flow position of the firms that experienced significant productivity improvements. Hypothesis 1: There has been a significant improvement in the management of accounts receivable that has led to a significant improvement in the accounts rece
19、ivable turnover during the period 1990 to 2004. Hypothesis 1a: The distribution of the accounts receivable turnover ratio has become more positively skewed over the 1990-2004 time period. Hypothesis 2: There has been a significant improvement in the management of inventory that has led to a signific
20、ant improvement in the inventory turnover during the period 1990 to 2004. Hypothesis 2a: The distribution of the inventory turnover ratio has become more positively skewed over the 1990-2004 time period. Hypothesis 3: There has been a significant improvement in the management of accounts payable tha
21、t has led to a significant decrease in the accounts payable turnover during the period 1990 to 2004. Hypothesis 3a: The distribution of the accounts payable turnover ratio has become more negatively skewed over the 1990-2004 time period. Hypothesis 4: There has been a significant improvement in the
22、management of working capital that has led to a significant improvement in the working capital per share during the period 1990 to 2004. Hypothesis 4a: The distribution of the working capital per share ratio has become more positively skewed over the 1990-2004 time period Hypothesis 5: There has bee
23、n a significant improvement in the management of working capital that has led to a significant improvement in the cash flow per share during the period 1990 to 2004. Hypothesis 5a: The distribution of the cash flow per share ratio has become more positively skewed over the 1990-2004 time period. Hyp
24、othesis 6: There has been a significant improvement in the management of capital expenditures that has led to a significant reduction in the investment ratio during the period 1990 to 2004. Hypothesis 6a: The distribution of the investment ratio has become less positively skewed over the 1990-2004 t
25、ime period. METHODOLOGY The empirical tests of these hypotheses were conducted on an original sample of 50 selected at random from the 2005 Fortune 500. We excluded banking institutions and firms from the oil and gas industries since they have unique characteristics and two firms selected at random
26、were eliminated from consideration because they were in bankruptcy. The final viable sample was 48 spread across industries and then Delphi declared bankruptcy during the analysis period. Data were collected from Compustat for the years 1990-2004. After calculating the ratios some firms were elimina
27、ted from consideration for individual ratios because they did not have enough data points； because they were acquired or were formed through acquisition during the study period； because they went bankrupt during the study period； or they did not report the data categories needed to calculate a speci
28、fic ratio during an extended period of time during the study time frame. This sample consisted of non-bank institutions across a variety of industries. The purpose of this study is to determine whether any evidence exists to support the hypotheses stated above. And, if any of the hypotheses are conf
29、irmed, this would be one of the first studies to attribute empirical results for financial ratios to changes in management practices over time. EMPIRICAL RESULTS The data were analyzed and summary statistics were calculated for the sample firms.It reports the means of five financial ratios of intere
30、st: accounts receivable turnover, inventory turnover, accounts payable turnover, working capital per share, and cash flow per share. As expected, account receivable turnover and inventory turnover increase monotonically over the 15 year time period. Corporations have focused on improving these measu
31、res using a variety of managerial techniques. In managing accounts receivable corporations have utilized techniques such as employing more vigorous collection procedures, offering more generous cash discounts to early payers, paying early and taking discounts even when discounts are not offered, fac
32、toring receivables, improving product quality to reduce disputed receivables which tend not to be paid while the dispute remains unresolved, etc. In managing inventory firms have utilized just-in-time procedures with suppliers to reduce storage while awaiting production； make-to-order procedures to
33、reduce work-in-process inventory, lean manufacturing initiatives to reduce the order-to-ship cycle time, quality programs that emphasize design for manufacture to reduce the number of parts, supplier rationalization to reduce the number of suppliers which reduces the number of different parts, etc. The numbers reported by writer verify that these corporate initiatives and programs seem to be working and improving results.
