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dc.contributor.authorJohn, Costaen
dc.date.accessioned2016-06-27T19:03:39Zen
dc.date.available2016-06-27T19:03:39Zen
dc.date.issued2001-12en
dc.identifiereprint:270en
dc.identifier.urihttp://hdl.handle.net/10919/71545en
dc.description.abstractThe purpose of this study was to compare the effectiveness of the current ratio and the cash conversion cycle in evaluating working capital cash flows from a diagnostic and a predictive aspect.The author analyzed two case studies. Each company was reviewed over a five-year period. For each company the writer calculated the annual current ratio and the cash conversion cycle and examined the trends over the five-year periods under review.Results of these analyses indicated that the cash conversion cycle was more effective than the current ratio in diagnosing the health of each company’s working capital cash flows. The cash conversion cycle also signaled a change in liquidity earlier than the current ratio, suggesting that the former had more effective predictive capabilities than the latter. The central implication of these findings is that the cash conversion cycle might be a more useful diagnostic and predictive tool than the current ratio in liquidity analysis.The research findings were also consistent with improvement or deterioration in each company’s underlying strategic performance as measured by critical changes in its competitive position at the same point in time as the cash conversion cycle trend shifted.These results suggest that the cash conversion cycle may provide insights into the impact of planned product-market strategy on shareholder value.en
dc.format.mimetypeapplication/pdfen
dc.language.isoenen
dc.publisherCalifornia Coast Universityen
dc.rightsIn Copyrighten
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/en
dc.subjectworking capitalen
dc.subjectcash flowen
dc.subjectfinancial ratiosen
dc.subject.lccHGen
dc.titleA Comparison of the Current Ratio and the Cash Conversion Cycle in Evaluating Working Capital Cash Flowsen
dc.typeDissertationen
dc.contributor.departmentBusiness Administrationen
thesis.degree.leveldoctoralen
thesis.degree.grantorCalifornia Coast Universityen


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