The relationship between working capital management and profitability of listed companies in the Athens Stock Exchange Dr Ioannis

Lazaridis Professor University of Macedonia* Department of Accounting & Finance MSc Dimitrios Tryfonidis PhD Candidate University of Macedonia* Department of Accounting & Finance *156 N. Egnatia Str. 54006 Thessaloniki Greece Tel.: 0030 2310 891697 Fax: 0030 2310 891650 E-mail: lazarid@uom.gr
Abstract In this paper we investigate the relationship of corporate profitability and working capital management. We used a sample of 131 companies listed in the Athens Stock Exchange (ASE) for the period of 2001-2004. The purpose of this paper is to establish a relationship that is statistical significant between profitability, the cash conversion cycle and its components for listed firms in the ASE. The results of our research showed that there is statistical significance between profitability, measured through gross operating profit, and the cash conversion cycle. Moreover managers can create profits for their companies by handling correctly the cash conversion cycle and keeping each different component (accounts receivables, accounts payables, inventory) to an optimum level.

Introduction Capital structure and working capital management are two areas widely revisited by academia in order to postulate firms profitability. Working capital management have been approached in numerous ways. Other researchers studied the impact of optimum inventory management while other authors studied the management of accounts receivables in an optimum way that leads to profit maximisation1. According to Deloof
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(2003) the way that working capital is

Besley, Scott and R.L. Meyer (1987), An Empirical Investigation of Factors Affecting the Cash Conversion Cycle, Annual Meeting of the Financial Management Association, Las Vegas Nevada. Lazaridis Ioannis, K.Lyroudi (2000), Short-term financial management of the business in Greece and in Cyprus, Business and Economics Society International. 2 Deloof M. (2003), Does Working Capital Management Affect Profitability of Belgian Firms?, Journal of Business Finance & Accounting, 30 (3) & (4), p. 585 Blackwell Publishing.

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Electronic copy available at: http://ssrn.com/abstract=931591

managed has a significant impact on profitability of firms. This result indicates that there is a certain level of working capital requirements which potentially maximises returns. Other work on the field of working capital management focuses on the routines employed by firms. This research showed that firms which focus on cash management were larger, with fewer cash sales, more seasonality and possibly more cash flow problems. While smaller firms focused more on stock management and less profitable firms were focused on credit management routines3. It is suggested that high growth firms follow a more reluctant credit policy towards their customers, while they tie up more capital in the form of inventory. Meanwhile accounts payables will increase due to better relations of suppliers with financial institutions which divert this advantage of financial cost to their clients4. According to Wilner (2000) most firms extensively use trade credit despite its apparent greater cost, and trade credit interest rates commonly exceed 18 percent5. In addition to that he states that in 1993 American firms extended their credit towards customers by 1.5 trillion dollars. Similarly Deloof (2003) found out through statistics from the National Bank of Belgium that in 1997 accounts payable were 13% of their total assets while accounts receivables and inventory accounted for 17% and 10% respectively. Summers and Wilson (2000) report that in the UK corporate sector more than 80% of daily business transactions are on credit terms6. There seems to be a strong relation between the cash conversion cycle of a firm and its profitability. The three different components of cash conversion cycle (accounts payables, accounts receivables and inventory) can be managed in different ways in order to maximise profitability or to enhance the growth of a company. Sometimes trade credit is a vehicle to attract new customers. Many firms are prepared to change their standard credit terms in order to win new customers and to gain large orders7. In addition to that credit can stimulate sales because it allows customers to assess product quality before paying8. Therefore it is up to the individual company whether a marketing approach should be followed when managing the working capital through credit extension. However the financial department of such a company will face cash flow and liquidity problems since capital will be invested in customers and inventory respectively. In order to have maximum value, equilibrium should
Howorth C., P. Westhead (2003), The focus of working capital management in UK small firms, Management Accounting Research 14, pp 97-111, Blackwell Publishing. 4 Petersen M.A and R.G Rajan (1997), Trade Credit: Theory and Evidence, Review of Financial Studies, Vol. 10 (3), pp 661-691. 5 Wilner B., (February 2000) The exploitation of relationships in financial distress: The case of trade credit, The Journal of Finance, Vol 55, No1, pp153. 6 Summers B., N. Wilson (Jan/Mar 2000), Trade Credit Management and the Decision to Use Factoring: An Empirical Study, Journal of Business Finance & Accounting, 27 (1) & (2), pp 37- 68. 7 Nam Sang Cheng & Richard Pike (2003), The Trade Credit Decision: Evidence of UK Firms, Managerial and Decision Economics, 24: (419-438). 8 Long MS, IB Malitz, S.A. Ravid (1993), Trade Credit, Quality Guarantees, and Product Marketability, Financial Management, Vol. 22, No4, pp 117-127
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Electronic copy available at: http://ssrn.com/abstract=931591

be maintained in receivables-payables and inventory. According to Pike & Cheng (2001) credit management seeks to create, safeguard and realise a portfolio of high quality accounts receivable. Given the significant investment in accounts receivable by most large firms, credit management policy choices and practices could have important implications for corporate value9. Successful management of resources will lead to corporate profitability, but how can we measure management success since a period of credit granting might lead to increased sales and market share whilst accompanied by decreased profitability or the opposite? Since working capital management is best described by the cash conversion cycle we will try to establish a link between profitability and management of the cash conversion cycle. This simple equation encompasses all three very important aspects of working capital management. It is an indication of how long a firm can carry on if it was to stop its operation or it indicates the time gap between purchase of goods and collection of sales. The optimum level of inventories will have a direct effect on profitability since it will release working capital resources which in turn will be invested in the business cycle, or will increase inventory levels in order to respond to higher product demand. Similarly both credit policy from suppliers and credit period granted to customers will have an impact on profitability. In order to understand the way working capital is managed cash conversion cycle and its components will be statistically analysed. In this paper we investigate the relationship between working capital management and firms profitability for 131 listed companies in the Athens Stock Exchange for the period 2001-2004. The purpose of this paper is to establish a relationship that is statistical significant between profitability, the cash conversion cycle and its components for listed firms in the ASE (Athens Stock Exchange). The paper is structured as follows. In the next section we present the variables used as well as the chosen sample of firms. Results of the descriptive statistics accompanied with regression modelling relating profitability (the dependent variable) against other independent variables including components of the cash conversion cycle, in order to test statistical significance. Finally the last section discusses the findings of this paper and comes up with conclusions related with working capital management policies and profitability.

2. Data Collection and Variables

(i) Data Collection The data collected were from listed firms in the Athens Stock Exchange Market. The reason we chose this market is primarily due to the reliability of the financial statements. Companies
Pike R., Nam Sang Cheng (2001), Credit Management: An Examination of Policy Choices, Practices and Late Payment in UK Companies, Journal of Business Finance & Accounting, Vol 28, No78, pp 1013.
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listed in the stock market have an incentive to present profits if those exist in order to make their shares more attractive. Contrary to listed firms, non listed firms in Greece have less of an incentive to present true operational results and usually their financial statements do not reflect real operational and financial activity. Hiding profits in order to avoid corporate tax is a common tactic for non listed firms in Greece which makes them less of a suitable sample for analysis where one can draw inference, based on financial data, for working capital practices. For the purpose of this research certain industries have been omitted due to their type of activity. We followed the classification of NACE10 industries from which electricity and water, banking and financial institutions, insurance, rental and other services firms have been omitted. The original sample consisted of about 300 firms which narrowed down to 131 companies. The most recent period for which we had complete data was 2001-2004. Some of the firms were not included in the data due to lack of information for the certain period. Finally the financial statements were obtained from the ICAP SA11 database. Our analysis uses stacked data for the period 2001-2004 which results to 524 total observations.

(ii) Variables As mentioned earlier in the introduction the cash conversion cycle is used as a measure in order to gauge profitability. This measure is described by the following equation: Cash Conversion Cycle = No of Days A/R12 + No of Days Inventory No of Days A/P13 (1)

In turn the components of cash conversion cycle are given below: No of Days A/R = Accounts Receivables/Sales*365 (2) No of Days Inventory = Inventory/Cost of Goods Sold*365 (3) No of Days A/P = Accounts Payables/Cost of Goods Sold*365 (4) Another variable chosen for the model specification is that of company size measured through the natural logarithm of sales. Shares and participation to other firm are considered as fixed financial assets. The variable I we use which is related to financial assets is the following: Fixed Financial Assets Ratio = Fixed Financial Assets/Total Assets (5)

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Classification of Economic Activities in the European Community International Capital SA 12 Accounts Receivables 13 Accounts Payables

This variable is used since for many listed companies financial assets comprise a significant part of their total assets. This variable will be used later on in order to obtain an indication how the relationship and participation of one firm to others affects its profitability. Another variable used in order to perform regression analysis later on, includes financial debt measured through the following equation: Financial Debt Ratio = (Short Term Loans + Long Term Loans)/Total Assets (6) This is used in order to establish relation between the external financing of the firm and its total assets. Finally the dependent variable used is that of gross operating profit. In order to obtain this variable we subtract cost of goods sold from total sales and divide the result with total assets minus financial assets. Gross Operating Profit = (Sales COGS14)/(Total Assets Financial Assets (7) The reason for using this variable instead of earnings before interest tax depreciation amortization (EBITDA) or profits before or after taxes is because we want to associate operating success or failure with an operating ratio and relate this variable with other operating variables (i.e cash conversion cycle). Moreover we want to exclude the participation of any financial activity from operational activity that might affect overall profitability, thus financial assets are subtracted from total assets. 3. Descriptive Statistics The following table gives the descriptive statistics of the collected variables. The total of observations sums to n = 524. On average 16.8% of total assets are financial assets (including participation to other subsidiaries). Total sales have a mean of 118.9 million euros while the median is 31.9 million. The firms included in our sample had an average of 2.58% net operating profit. The credit period granted to their customers ranged at 148 days on average (median 130 days) while they paid their creditors in 96 days on average (median 73 days). Inventory takes on average 136 days to be sold (median 104 days). Overall the average cash conversion cycle ranged at 188 days (median 165 days).

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Cost of Goods Sold

Variable FIXED FA LNSALES SALES FIN DEBT GROSS PR ACID 01 INV 01 A/R 01 A/P 01 CCC 01

N 524 524 524 524 524 524 524 524 524 524

Mean 0,16815 17,364 118604041 0,18497 24,583 2,144 136,90 148,25 96,10 188,99

Median 0,09861 17,278 31910588 0,16917 20,934 1,110 104,00 130,00 73,00 165,00

TrMean 0,14744 17,346 61177631 0,17452 23,572 1,364 123,04 139,45 82,58 184,18

StDev 0,18459 1,476 362417739 0,17067 17,795 6,571 131,39 104,19 107,22 209,37

SE Mean 0,00806 0,064 15832292 0,00746 0,777 0,287 5,74 4,55 4,68 9,15

Variable FIXED FA LNSALES SALES 01 FIN DEBT GROSS PR ACID 01 INV 01 A/R 01 A/P 01 CCC 01

Minimum 0,00000 7,265 1430 0,00000 -104,771 0,010 0,00 1,00 0,00 -874,00

Maximum 0,99609 22,234 4529771655 0,72735 91,384 95,800 969,00 778,00 960,00 1154,00

Q1 0,02887 16,394 13175622 0,00000 13,228 0,793 47,00 77,00 27,25 68,00

Q3 0,26936 18,199 80128151 0,30855 32,683 1,708 176,00 185,00 130,75 277,00

In the following table we have the Pearson15 correlation table for the variables that will be included in our regression model. We observe that the net operating profit is negatively correlated with the variables of number of days accounts receivables, number of days accounts payables and cash conversion cycle. These results are consistent with the view that the shorter the period between production and sale of products the larger firms profitability. It is apparent that companies with cash in hand can purchase raw materials from suppliers with better prices. Maybe that is the reason why gross operating profit is positively related with financial debt. This means that listed companies in Greece take advantage of financial debt in order to decrease their cash conversion cycle and increase profitability. Meanwhile the negative relation between accounts payables and gross profit indicate that more profitable firms delay their payment towards their suppliers-creditors.

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We calculated the Pearson product moment coefficient of correlation (also called the correlation coefficient or correlation) for pairs of variables. The correlation coefficient is a measure of the degree of linear relationship between two or more variables. We also displayed the p values.

FIXED FA

FIN DEBT

LNSALES

GROSS PR

INV 01

A/R 01

A/P 01

FIN DEBT

-0,054 0,214

LNSALES

0,141 0,001

0,172 0,000

GROSS PR

0,119 0,006

-0,082 0,060

0,230 0,000

INV 01

-0,096 0,028

0,093 0,033

-0,236 0,000

-0,160 0,000

A/R 01

-0,060 0,173

0,092 0,036

-0,361 0,000

-0,201 0,000

0,284 0,000

A/P 01

0,057 0,191

0,034 0,433

-0,170 0,000

0,182 0,000

0,099 0,024

0,034 0,433

CCC 01

-0,119 0,006

0,086 0,048

-0,240 0,000

-0,294 0,000

0,718 0,000

0,658 0,000

-0,433 0,000

4. Regression Analysis So far we established a framework of literature and data analysis in order to investigate the impact of working capital management on profitability. In order to shed more light on the relationship of working capital management on firms profitability we use regression analysis. In the following proposed models we examine the endogenous variable which is profitability (measured through operational profitability as mentioned in section 2 (ii) by equation (7)) against six exogenous variables and industry dummy variables. The independent variables are fixed financial assets (measured by equation (5)), the natural logarithm of sales, financial debt ratio (measured through equation (6)) and cash conversion cycle. We included in the preceding models industry dummy variables according to NACE coding. However, in order to have the minimum degrees of freedom necessary we used general sectors of NACE categories instead of having a more detailed 4 digit codes (the 4 digit coding gave 77 different categories). Hence the total number of NACE sectors was nine, which resulted to eight industry dummy variables (in order not to fall to what is called the dummy variable trap, which is the situation of perfect collinearity or multicollinearity). The total number of observations is 524, which represents stacked data for the period 20012004 for listed firms in the Athens Stock Exchange. Following is the first regression, where

gross profit is regressed against fixed financial assets, financial debt, the natural logarithm of sales, cash conversion cycle and industry dummy variables:
The regression equation is GROSS PROFIT = - 29,8 + 7,31 FIXED FA - 16,3 FIN DEBT - 0,0195 CCC 01 + 2,49 LNSALES + 12,8 D1 + 16,5 D3 + 22,4 D5 + 13,1 D6 + 19,4 D7 + 27,1 D8 Predictor Constant FIXED FA FIN DEBT CCC 01 LNSALES D1 D3 D5 D6 D7 D8 S = 15,53 Coef -29,764 7,308 -16,321 -0,019539 2,4902 12,792 16,533 22,408 13,095 19,445 27,087 SE Coef 9,134 3,836 4,230 0,003700 0,4997 4,567 2,396 2,517 4,531 3,134 5,994 T -3,26 1,91 -3,86 -5,28 4,98 2,80 6,90 8,90 2,89 6,21 4,52 P 0,001 0,057 0,000 0,000 0,000 0,005 0,000 0,000 0,004 0,000 0,000 VIF 1,1 1,1 1,3 1,2 1,3 3,1 2,7 1,3 1,8 1,2

R-Sq = 25,3%

R-Sq(adj) = 23,8%

Analysis of Variance Source Regression Residual Error Total DF 10 513 523 SS 41900,2 123712,6 165612,8 MS 4190,0 241,2 F 17,37 P 0,000

Durbin-Watson statistic = 1,78

This regression equation shows that there is a negative relationship between cash conversion cycle and profitability which is consistent with the view that a decrease in the cash conversion cycle will generate more profits for a company. The above result is highly significant. Moreover the regression shows that the larger firms (measured through the natural logarithm of sales) the larger its gross operating profit with a very high level of significance. Meanwhile the rest of the model variables are statistically significant where gross operating profit decreases as financial debt increase while fixed financial assets have a positive coefficient. The F test equals 17.37 and is highly significant. This result makes economic sense since if all coefficients were zero then a firm would have negative results i.e Gross Profit = -29.8. In the second regression we have the dependent variable gross operating profit and the same independent variables as in the first regression equation. The only difference is the substitution of the cash conversion cycle with the accounts payables for the period 20012004. We observed that there is a negative relationship between gross operating profit and accounts payables. This result is highly significant and does make economic sense, since the longer a firm delays its payments the higher level of working capital levels it reserves and uses in order to increase profitability.

The regression equation is GROSS PROFIT = - 56,2 + 7,70 FIXED FA - 19,9 FIN DEBT + 0,0370 A/P 01 + 3,67 LNSALES + 5,73 D1 + 15,8 D3 + 21,5 D5 + 18,5 D6 + 19,2 D7 + 21,1 D8 Predictor Constant FIXED FA FIN DEBT A/P 01 LNSALES D1 D3 D5 D6 D7 D8 S = 15,56 Coef -56,153 7,696 -19,915 0,037033 3,6705 5,727 15,762 21,520 18,469 19,184 21,126 SE Coef 8,969 3,838 4,265 0,007342 0,4930 4,559 2,389 2,516 4,509 3,151 6,357 T -6,26 2,01 -4,67 5,04 7,44 1,26 6,60 8,55 4,10 6,09 3,32 P 0,000 0,045 0,000 0,000 0,000 0,210 0,000 0,000 0,000 0,000 0,001 VIF 1,1 1,1 1,3 1,1 1,3 3,1 2,7 1,3 1,8 1,3

R-Sq = 25,0%

R-Sq(adj) = 23,5%

Analysis of Variance Source Regression Residual Error Total DF 10 513 523 SS 41338,3 124274,5 165612,8 MS 4133,8 242,3 F 17,06 P 0,000

Durbin-Watson statistic = 1,82

In the third equation we use the same variables except the one of accounts payables which we replace with accounts receivables. The results show that there is a negative relationship between gross operating profit and accounts receivables. This indication is highly significant and shows that managers can improve profitability by reducing the credit period granted to their customers.
The regression equation is GROSS PROFIT = - 27,6 + 9,51 FIXED FA - 15,5 FIN DEBT - 0,0293 A/R 01 + 2,35 LNSALES + 9,95 D1 + 16,3 D3 + 22,8 D5 + 14,3 D6 + 22,9 D7 + 33,8 D8 Predictor Constant FIXED FA FIN DEBT A/R 01 LNSALES D1 D3 D5 D6 D7 D8 S = 15,71 Coef -27,627 9,514 -15,458 -0,029328 2,3543 9,950 16,271 22,774 14,293 22,856 33,774 SE Coef 9,798 3,855 4,300 0,007400 0,5304 4,566 2,427 2,562 4,571 3,160 5,956 T -2,82 2,47 -3,59 -3,96 4,44 2,18 6,70 8,89 3,13 7,23 5,67 P 0,005 0,014 0,000 0,000 0,000 0,030 0,000 0,000 0,002 0,000 0,000 VIF 1,1 1,1 1,3 1,3 1,3 3,1 2,8 1,3 1,8 1,1

R-Sq = 23,6%

R-Sq(adj) = 22,1%

Analysis of Variance Source Regression Residual Error Total DF 10 513 523 SS 39050,0 126562,8 165612,8 MS 3905,0 246,7 F 15,83 P 0,000

In the last regression we added number of days for inventory in an attempt to explain gross operating profit. Although there is negative relationship between gross profit and inventory which can be translated that the longer inventory is tied in the less working capital is available, this result is not statistically significant.
The regression equation is GROSS PROFIT = - 41,6 + 9,14 FIXED FA - 16,9 FIN DEBT - 0,00685 INV 01 + 3,04 LNSALES + 10,6 D1 + 15,1 D3 + 21,4 D5 + 15,5 D6 + 21,0 D7 + 33,0 D8 Predictor Constant FIXED FA FIN DEBT INV 01 LNSALES D1 D3 D5 D6 D7 D8 S = 15,93 Coef -41,596 9,140 -16,947 -0,006848 3,0405 10,569 15,109 21,434 15,545 20,964 33,020 SE Coef 9,396 3,929 4,348 0,006202 0,5106 4,872 2,442 2,575 4,693 3,234 6,037 T -4,43 2,33 -3,90 -1,10 5,96 2,17 6,19 8,32 3,31 6,48 5,47 P 0,000 0,020 0,000 0,270 0,000 0,031 0,000 0,000 0,001 0,000 0,000 VIF 1,1 1,1 1,4 1,2 1,5 3,0 2,7 1,3 1,8 1,1

R-Sq = 21,4%

R-Sq(adj) = 19,9%

Analysis of Variance Source Regression Residual Error Total DF 11 512 523 SS 39105,9 126506,9 165612,8 MS 3555,1 247,1 F 14,39 P 0,000

Durbin-Watson statistic = 1,77

All regression models were tested for multicollinearity. The variance inflation factor (VIF) is used to detect whether one predictor has a strong linear association with the remaining predictors (the presence of multicollinearity among the predictors). VIF measures how much the variance of an estimated regression coefficient increases if your predictors are correlated (multicollinear). The largest VIF among all predictors is often used as an indicator of severe multicollinearity. Montgomery and Peck16 suggest that when VIF is greater than 5-10, then the regression coefficients are poorly estimated. All predictors had a variance inflation factor ranged between 1-1.4 which indicates that there is absence of multicollinearity between the predictors in the regression models.

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D.C. Montgomery and E.A. Peck (1982). Introduction to Linear Regression Analysis. John Wiley & Sons.

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5. Conclusion This paper adds to existing literature such as Shin and Soenen (1998) who found a strong negative relationship between the cash conversion cycle and corporate profitability for listed American firms for the 1975- 1994 period and Deloof (2003) who found negative relationship between profitability and number of days accounts receivable, inventories and accounts payable of Belgian firms for the period 1992-199617 18. So far we observed a negative relationship between profitability (measured through gross operating profit) and the cash conversion cycle which was used as a measure of working capital management efficacy. Therefore it seems that operational profitability dictates how managers or owners will act in terms of managing the working capital of the firm. We observed that lower gross operating profit is associated with an increase in the number days of accounts payables. The above could lead to the conclusion that less profitable firms wait longer to pay their bills taking advantage of credit period granted by their suppliers. The negative relationship between accounts receivables and firms profitability suggests that less profitable firms will pursue a decrease of their accounts receivables in an attempt to reduce their cash gap in the cash conversion cycle. Likewise the negative relationship between number of days in inventory and corporate profitability suggests that in the case of a sudden drop in sales accompanied with a mismanagement of inventory will lead to tying up excess capital at the expense of profitable operations. Therefore managers can create profits for their companies by handling correctly the cash conversion cycle and keeping each different component (accounts receivables, accounts payables, inventory) to an optimum level.

Deloof M. (2003), Does Working Capital Management Affect Profitability of Belgian Firms?, Journal of Business Finance & Accounting, 30 (3) & (4), April/May 2003, p. 585 Blackwell Publishing. 18 Shin, H.H. and L. Soenen (1998), Efficiency of Working Capital and Corporate Profitability, Financial Practice and Education, Vol 8, No2, pp. 37-45

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Bibliography

1. Besley, Scott and R.L. Meyer (1987), An Empirical Investigation of Factors Affecting the Cash Conversion Cycle, Annual Meeting of the Financial Management Association, Las Vegas Nevada. 2. D.C. Montgomery and E.A. Peck (1982). Introduction to Linear Regression Analysis. John Wiley & Sons. 3. Deloof M. (2003), Does Working Capital Management Affect Profitability of Belgian Firms?, Journal of Business Finance & Accounting, 30 (3) & (4), p.585 Blackwell Publishing. 4. Howorth C., P. Westhead (2003), The focus of working capital management in UK small firms, Management Accounting Research 14, pp 97-111, Blackwell Publishing. 5. Lazaridis Ioannis, K.Lyroudi (2000), Short-term financial management of the business in Greece and in Cyprus, Business and Economics Society International. 6. Long MS, IB Malitz, S.A. Ravid (1993), Trade Credit, Quality Guarantees, and Product Marketability, Financial Management, Vol. 22, No4, pp 117127. 7. Nam Sang Cheng & Richard Pike (2003), The Trade Credit Decision: Evidence of UK Firms, Managerial and Decision Economics, 24: (419-438). 8. Petersen M.A and R.G Rajan (1997), Trade Credit: Theory and Evidence, Review of Financial Studies, Vol. 10 (3), pp 661-691. 9. Pike R., Nam Sang Cheng (2001), Credit Management: An Examination of Policy Choices, Practices and Late Payment in UK Companies, Journal of Business Finance & Accounting, Vol 28, No78, pp 1013. 10. Shin, H.H. and L. Soenen (1998), Efficiency of Working Capital and Corporate Profitability, Financial Practice and Education, Vol 8, No2, pp. 3745. 11. Summers B., N. Wilson (Jan/Mar 2000), Trade Credit Management and the Decision to Use Factoring: An Empirical Study, Journal of Business Finance & Accounting, 27 (1) & (2), pp 37- 68. 12. Wilner B. (February 2000), The exploitation of relationships in financial distress: The case of trade credit, The Journal of Finance, Vol 55, No1, pp153.

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