dc.contributor.author |
Moodley, T.
|
|
dc.contributor.author |
Ward, Michael
|
|
dc.contributor.author |
Muller, C.
|
|
dc.date.accessioned |
2018-04-04T05:33:15Z |
|
dc.date.available |
2018-04-04T05:33:15Z |
|
dc.date.issued |
2017 |
|
dc.description.abstract |
Effective working capital management assists a firm in achieving improved liquidity through the management of the components of receivables, inventory, and payables. Previous studies have established that changes in working capital have a strong positive correlation to profitability and that whilst changes to receivables and inventory have a positive correlation to profitability, changes in payables have an inverse relationship. The inverse correlation between payables and profitability is contrary to the theory that advocates extending payment terms as a means of managing working capital and improving liquidity. We apply a buy-and-hold portfolio methodology to an extensive database of Johannesburg Stock Exchange (JSE) listed South African companies over the period 1986 to 2014. We find that for those companies in industries that have a significant investment in payables, there is a significant positive association between changes in payable days and shareholder return, which supports the general theory of working capital management. |
en_ZA |
dc.description.department |
Gordon Institute of Business Science (GIBS) |
en_ZA |
dc.description.librarian |
hj2018 |
en_ZA |
dc.description.sponsorship |
The National Research Foundation (Grant 85800) |
en_ZA |
dc.description.uri |
http://www.tandfonline.com/loi/rsar20 |
en_ZA |
dc.identifier.citation |
T. Moodley, M. Ward & C. Muller (2017) The relationship between the management of payables and the return to investors, South African Journal of Accounting Research, 31:1, 35-43, DOI: 10.1080/10291954.2015.1105555. |
en_ZA |
dc.identifier.issn |
1029-1954 (print) |
|
dc.identifier.issn |
2376-3981 (online) |
|
dc.identifier.other |
10.1080/10291954.2015.1105555 |
|
dc.identifier.uri |
http://hdl.handle.net/2263/64379 |
|
dc.language.iso |
en |
en_ZA |
dc.publisher |
Routledge |
en_ZA |
dc.rights |
© 2016 South African Journal of Accounting Research. This is an electronic version of an article published in South African Journal of Accounting Research, vol. 31, no. 1, pp. 35-43, 2017. doi : 10.1080/10291954.2015.1105555. South African Journal of Accounting Research is available online at : http://www.tandfonline.com/loi/rsar20. |
en_ZA |
dc.subject |
Working capital management |
en_ZA |
dc.subject |
Accounts payable |
en_ZA |
dc.subject |
Management of payables |
en_ZA |
dc.subject |
Return to investors |
en_ZA |
dc.title |
The relationship between the management of payables and the return to investors |
en_ZA |
dc.type |
Postprint Article |
en_ZA |