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The purpose of this paper is to investigate the implementation of the targeted subsidies plan in the rural and agricultural sectors of Iran and its impact on the government’s sales income, operating cash flow (OCF) and receivables collection ratio.

Using the panel data approach, the authors examine their hypotheses on a sample of six provinces of Iran, including Khorasan Razavi, Khorasan Jonoubi, Kerman, Semnan, Kermanshah and Kurdistan, during 2009-2013.

The findings indicate that the implementation of the targeted subsidies plan leads to increased actual electricity sales in the rural sector. Further, while the coefficient on OCF in the estimated model suggests a significant and positive relationship between the OCF and the implementation of the targeted subsidies plan, the coefficient on receivables collection ratio demonstrates a significant but negative association. Contrary to the government’s primary expectations, the results do not provide any support for the reduction of electricity consumption.

The current study is apparently the first study which conducted on the subject under study.

Despite economic growth in the construction sector of the USA, profit margins are persistently low. An examination of collection practices of over 400 construction firms revealed a high number of firms with a collection period ratio above 30 days. This study aims to examines the variance between collection period ratio (days in accounts receivables, DAR) and days in accounts payables (DAP) and its correlation with profitability ratios [e.g. gross profit margin (GPM) and net profit margin (NPM)].

Descriptive statistics were used to observe trends over three years of financial reporting (2013 through 2016), while correlation statistics were used to understand relationship or association between the different financial ratios and the collection period variance (CPV). Respondent firms were stratified by the North American Industry Classification System, company type and revenue size.

Conventional theory holds that increasing financial expenses because of collections negatively impacts profitability. Therefore, the hypothesis of the study suggested a statistical correlation between the CPV and profitability measures. Results of the study, however, supported the null hypothesis. Reasons for the lack of correlation are considered as well as necessary follow-up studies before rejecting the hypothesis.

No such study was found specific to the construction industry, and as such, this study contributes to better understanding the implications of extensive collection periods. Further, this study contradicts assumptions about the behavior of the construction industry and the causal relationship between extensive collection periods and profitability.

Existing studies that documented the effect of financial distress on trade credit provisions did not include measures financial constraint. It is possible that financial distress is tie to financial constraints, and both financial distress and financial constraints mutually reinforce each other in their effects on trade credit provision. The purpose of this study is to evaluate the effects of financial constraint and financial distress on trade credit provisions in the UK FTSE 350 listed firms.

This study employs panel data in the estimation of the determinants of accounts payables and accounts receivables of the UK FTSE 350 firms from 2009 to 2017.

This study finds that financial distress has significant positive effect on accounts payables and a significant negative effect on accounts receivables. Financial constraints have significant negative effect on accounts payables and a significant positive effect on accounts receivables.

Trade creditor desiring to maintain an enduring product-market relationship grant more concessions to customer in financial distress. The amount of trade credit that sellers provide to financially constrained firm is an increasing function of the buyer's creditworthiness. The urgent cash needs of financially distressed firms lead them to sell trade receivables to factoring company leading to reduction in trade receivables. Firm facing external financing constraints increase trade credit to customers in anticipation of cash flow inflow to enhance liquidity.

This study shows that financial distress and financial constraints mutually reinforce each other in their effects on trade credit provisions, and firm's financing condition contributes to divergence in trade credit policies.

The prompt‐payment discount offered by a company is an important determinant of its investment in accounts receivable. During inflation, this discount must be increased in order for the selling company to avoid having an increase in its average collection period, an increase in its investment in receivables, and decline in the wealth of its shareholders. This article presents the rationale for increasing the prompt‐payment discount during inflation and concludes with a table listing the necessary prompt‐payment discounts that will leave the real prompt‐payment discount unchanged and minimize the company's exposure to purchasing power losses.

Many businesses are faced with liquidity problems for various reasons. This is especially true for small businesses, since most must operate with fewer sources of both short and long term financing than larger firms. Where less financing is available, more assets must be held in liquid form to meet daily transactions and emergency requirements. Larger firms, that have better access to both the money and capital markets, can afford to hold fewer current assets and meet cash requirements just as quickly and efficiently through borrowing.

At the end of this session, learners should be able to:

• Understand why interpretation of financial statements is necessary.

• Calculate accounting ratios for profitability, liquidity, efficiency, capital structure and investors.

• Utilise ratio analysis to critically appraise an organisation’s published financial statements.

• Explain the limitations of ratio analysis.

Understand why interpretation of financial statements is necessary.

Calculate accounting ratios for profitability, liquidity, efficiency, capital structure and investors.

Utilise ratio analysis to critically appraise an organisation’s published financial statements.

Explain the limitations of ratio analysis.

This study examines the effect of working capital management on profitability of listed manufacturing firms in Ghana.

The study employs a quantitative research approach within the causal research design using a balance panel of 20 manufacturing listed firms from 2015 to 2019.

The study reveals that inventory management, account receivables, account payables, cash conversion cycle, current asset, current ratio and firm size have positive effects on return on assets (ROA) and return on return on equity(ROE) whilst leverage affects them negatively.

The study only covers 20 manufacturing firms generally due to data unavailability. However, the outcome has useful information for manufacturing firms.

The study brings to light effective ways of improving the profitability of manufacturing firms through policies.

The findings are beneficial to manufacturing firms and countries for the purpose of improving performance of firms and welfare of the people through direct and indirect chain effects of increasing investments, remunerations and scales of production.

This study adds insights into the existing literature on working capital management namely methodology, effects of components on profitability of manufacturing firms and socioeconomic implications- evidence from Ghana.

Firms in different countries operate in different business environments and prepare financial statements following, by necessity, their own countries' accounting standards. Benchmarks for assessing financial ratios of firms in different countries are likely to be different. In conducting financial ratio analyses, each country's unique cultural, business, financial, and regulatory characteristics have to be taken into consideration, for these external factors may exert significant effects on measurements of financial data. This study aims to investigate challenges in comparing financial ratios between Japanese firms and Chinese firms.

This study compares ten major financial ratios of 75 Chinese firms with financial ratios of 75 matched sample Japanese firms to determine if a common benchmark for each of the financial ratios can be applied to firms in both countries.

The results show significant differences in liquidity, solvency, and activity ratios between firms from these two countries. Further examination of differences in accounting standards, economic, and institutional environments between these two countries suggests that these external factors have significant effects on financial ratios and may have contributed to the observed differences.

This study is among the first to investigate the comparability of ratios between Japanese firms and Chinese firms to uncover potential challenges and warn investors of such challenges.

The authors document a persistent negative link between contemporaneous trade credit provision and subsequent firm-level operating performance.

Textual analysis of firms' profile descriptions is used to study the role of market segmentation and product differentiation in intermediating the nexus between trade credit and corporate performance. The paper relies on dynamic panel regression modeling to investigate the postulated empirical relationships. This approach allows to address endogeneity issues and to test a number of different model specifications.

Despite fueling short-term sales growth, the more generous trade credit terms are found to be associated with lower post hoc margins and declining overall business profitability. The market share is not affected by firms' proclivity to provide trade credit suggesting that the latter may not be effectively used as a long-term growth enhancement strategy. Firms' similarity to their competitors is found to play a salient role in altering the magnitude of the discovered negative relationship.

The authors find that the intensity of intra-industry competition measured by firms' similarity to their competitors magnifies the discovered negative trade credit-performance nexus. Therefore, generous trade credit may play a more important role in solidifying client–supplier relationships on the more segmented markets with a higher degree of product differentiation.