1. Cash Holdings, Working Capital and Firm Value: Evidence from France
- Author
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Ruta Autukaite, Eric Molay, Groupe de Recherche en Management - EA 4711 (GRM), Université Nice Sophia Antipolis (... - 2019) (UNS), and COMUE Université Côte d'Azur (2015-2019) (COMUE UCA)-COMUE Université Côte d'Azur (2015-2019) (COMUE UCA)-Institut d'Administration des Entreprises (IAE) - Toulon (IAE Toulon)-Institut d'Administration des Entreprises (IAE) - Nice-Université de Toulon (UTLN)
- Subjects
Finance ,050208 finance ,Cash and cash equivalents ,business.industry ,05 social sciences ,Invested capital ,Cash flow forecasting ,Operating cash flow ,0502 economics and business ,[SHS.GESTION]Humanities and Social Sciences/Business administration ,Cash flow statement ,Business ,Price/cash flow ratio ,Cash on cash return ,Cash management ,050203 business & management - Abstract
International audience; 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.
- Published
- 2014