Trade Receivables Policy of Distressed Firms and its Effect on the Cost of Financial Distress

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Trade Receivables Policy of Distressed Firms and its Effect on the Cost of Financial Distress

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dc.contributor.author Preve, Lorenzo
dc.contributor.author Molina, Carlos
dc.date.accessioned 2016-11-11T12:27:48Z
dc.date.available 2016-11-11T12:27:48Z
dc.date.issued 2009
dc.identifier.citation MOLINA, CA; PREVE, LA. Trade Receivables Policy of Distressed Firms and Its Effect on the Costs of Financial Distress. Financial Management (Wiley-Blackwell). 38, 3, 663-686, Sept. 2009. ISSN: 00463892. en_US
dc.identifier.uri https://riu.austral.edu.ar/handle/123456789/277
dc.description.abstract This paper studies the trade receivables policy of distressed firms as the trade-off between the firm's willingness to gain sales and the firm's need for cash. We find that firms increase trade receivables when they have profitability problems, but reduce trade receivables when they have cash flow problems. We also find that a firm that significantly cuts its trade receivables when in financial distress will experience an additional drop of at least 13% in sales and stock returns over the previously documented 20% average drop for financially troubled firms. Moreover, the performance decline of a firm in financial distress is significantly higher if the firm cuts trade receivables than if it does not. en_US
dc.language.iso en en_US
dc.publisher Financial Management en_US
dc.subject accounts receivable en_US
dc.subject commercial policy en_US
dc.subject corporations -- finance en_US
dc.subject liquidity (Economics) en_US
dc.subject profitability en_US
dc.title Trade Receivables Policy of Distressed Firms and its Effect on the Cost of Financial Distress en_US
dc.type Article en_US


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