Corporate returns and cash conversion cycles

  • Manuel L. Jose
  • Carol Lancaster
  • Jerry L. Stevens


This study examines the relationship between profitability measures and management of ongoing liquidity needs for a large cross-section of firms over a twenty-year period. Long-run equilibrium relationships between the cash conversion cycle, a measure of ongoing liquidity management, and alternative measures of profitability are tested using both nonparametric and multiple regression analysis. Industry and size differences are controlled. While there are exceptions to the general finding for specific firms and for specific industries, the paper offers strong evidence that aggressive working-capital policies enhance profitability.


Liquidity Management Profitability Measure Capital Management Financial Service Industry Cash Management 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Springer 1996

Authors and Affiliations

  • Manuel L. Jose
    • 1
  • Carol Lancaster
    • 2
  • Jerry L. Stevens
    • 2
  1. 1.University of AkronAkron
  2. 2.University of RichmondRichmond

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