The Impact of Working Capital Efficiencies on the Enterprise Value Option: Empirical Analysis from the Energy Sector
Advances in Business Research
View Archive InfoField | Value | |
Title |
The Impact of Working Capital Efficiencies on the Enterprise Value Option: Empirical Analysis from the Energy Sector
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Creator |
Lifland, Steven; High Point University
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Subject |
Finance;
Working Capital; Enterprise Value; Energy Sector; Capital markets; |
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Description |
This paper, looking within the energy sector, empirically tests the hypotheses that individual and/or net working capital efficiencies impact a company’s enterprise value (EV). The EV metric is unique for it allows an equity investor to assess the firm on the same basis as an acquirer in a merger-acquisition transaction. It represents an option or ‘right’ to buy a firm’s core cash flow or the value of claims on that cash flow. The results show there are significant negative associations between the net working capital efficiencies and enterprise value for large and mid-cap firms. From the perspective of the investoracquirer, the acquisition cost of a company is directly impacted and it shows why they need to pay attention as to how well firms simultaneously turn over their inventories, collect on trade receivables, and service their trade creditors.
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Publisher |
Tarleton State University and the University of Arkansas - Fort Smith
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Contributor |
—
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Date |
2011-12-31
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Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Articles Quantitative/Archival; |
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Format |
application/pdf
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Identifier |
http://journals.sfu.ca/abr/index.php/abr/article/view/51
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Source |
Advances in Business Research; Vol 2, No 1 (2011); 57-70
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Language |
eng
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Relation |
http://journals.sfu.ca/abr/index.php/abr/article/view/51/33
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Rights |
Authors who publish with this journal agree to the following terms:Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
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