Cash flow management, performance and risk: evidence from Greece

IF 3.8 Q2 BUSINESS EuroMed Journal of Business Pub Date : 2024-02-29 DOI:10.1108/emjb-09-2023-0245
Gerasimos Rompotis
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Abstract

Purpose

I seek to identify whether cash flow management can affect the performance and risk of the Greek listed companies.

Design/methodology/approach

This study examines the relationship of cash flow management with performance and risk, using a sample of 80 non-financial companies listed in the Athens Exchange. The study covers the period 2018–2022, and panel data analysis is applied. Both financial performance and stock return are taken into consideration, while risk concerns the volatility of the companies’ share prices. The various explanatory variables used include the net cash flow, free cash flow, cash conversion cycle days, cash flow from operating activities, cash flow from investing activities, cash flow from financing activities, inventory days, customer days and supplier days.

Findings

The empirical results provide evidence of a positive relationship between financial performance and net cash flow and free cash flow. In addition, operating cash flow is positively related to financial performance. The opposite is the case for investing and financing cash flow. Finally, some evidence of a negative relationship between financial performance and inventory and customer days is provided too. On the other hand, stock return and risk are not related to the cash flow management variables at all.

Originality/value

To the best of my knowledge, this is one of the few studies to examine the relationship of cash flow management with performance and risk, using data from the Greek stock market. The results can form an effective selection tool for investors seeking Greek companies with the highest financial performance potential, which may reward them with higher dividends.

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现金流管理、绩效和风险:来自希腊的证据
目的我试图确定现金流管理是否会影响希腊上市公司的业绩和风险。设计/方法/途径本研究以雅典交易所上市的 80 家非金融公司为样本,考察现金流管理与业绩和风险之间的关系。研究时间跨度为 2018-2022 年,采用面板数据分析。财务业绩和股票回报都被考虑在内,而风险则涉及公司股价的波动性。使用的各种解释变量包括净现金流、自由现金流、现金转换周期天数、经营活动现金流、投资活动现金流、融资活动现金流、存货天数、客户天数和供应商天数。此外,经营现金流与财务业绩呈正相关。投资和融资现金流的情况则相反。最后,还有一些证据表明财务业绩与库存和客户工作日之间存在负相关关系。原创性/价值 据我所知,这是为数不多的利用希腊股市数据研究现金流管理与业绩和风险关系的研究之一。研究结果可为投资者提供有效的选择工具,帮助他们寻找财务业绩潜力最大的希腊公司,从而获得更高的股息回报。
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来源期刊
CiteScore
9.80
自引率
19.20%
发文量
61
期刊介绍: The EuroMed Journal of Business (EMJB) is the premier publication facilitating dialogue among researchers from Europe and the Mediterranean. It plays a vital role in generating and disseminating knowledge about various business environments and trends in this region. By offering an up-to-date overview of emerging business practices in specific countries, EMJB serves as a valuable resource for its readers. As the official journal of the EuroMed Academy of Business, EMJB is committed to reflecting the economic growth seen in the European-Mediterranean region. It aims to be a focused and targeted business journal, highlighting environmental opportunities, threats, and marketplace developments in the area. Through its efforts, EMJB promotes collaboration and open dialogue among diverse research cultures and practices. EMJB serves as a platform for debating and disseminating research findings, new research areas and techniques, conceptual developments, and practical applications across various business segments. It seeks to provide a forum for discussing new ideas in business, including theory, practice, and the issues that arise within the field.
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