Return on Current Assets, Working Capital and Required Rate of Return on Equity

• Autorzy: Monika Bolek
• Języki publikacji: EN

Abstrakty

EN

The problem of return on current assets and return on working capital related to the cost of equity invested in a company is analyzed in this paper. Risk - return and liquidity - profitability trade-offs influence the company's equilibrium and management decisions. Liquidity is measured by the cash conversion cycle and it is related to the working capital strategy, measured by current ratio. Rate of return on current assets should be related to the rate of return on working capital that is linked to the cost of capital and the required rate of return. The results indicate that there is apositive relationship between the return on current assets and cash conversion cycle, apositive relationship between cost of equity and return on working capital meaning that the working capital, cash conversion cycle and current assets management are related to profitability, and cost of equity is determined by the required rate of return calculated based on the Capital Asset Pricing Model. (original abstract)

Słowa kluczowe

EN

Working capital; Assets; Enterprise risk

PL

Kapitał obrotowy; Aktywa; Ryzyko w przedsiębiorstwie

• Czasopismo: e-Finanse
• Rocznik: 2014
• Tom: 10
• Numer: nr 2
• Strony: 1--10

Twórcy

autor

Monika Bolek

• University of Lodz, Poland

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