logo
CanyamAI summaries for academic research
language
MobileMobile
  • Phone FeatureWeChat Mini Program
EnglishEnglish
noticeNotice
BlogBlog
delete
arrow
Return

Explaining Accruals Using Working Capital Efficiency

delete2026-05-01
delete0
PRE
AI
F
Frankel, Richard
Y
Yanrong Jia
Y
Yan Sun *
DOI：10.1111/jbfa.70066delete
deleteOriginal
deleteOriginal request for help
deleteShare
deleteSave
Abstract

Abstract

En 中文
We explore the empirical strength of the relation between working capital accruals and working capital utilization efficiency. Using the approach in financial statement analysis textbooks, we model accruals (i.e., investment in working capital) as a function of sales and working capital efficiency (WCE) in the previous and the current periods. We build a model to predict current-period WCE based on firm fundamentals. Our results reveal that these factors correlate with a firm's WCE. We find that incorporating WCE variables and their interactions with sales significantly improves the explanatory power of the accrual model. We also find that the model incorporating these variables does better than other models in predicting future operating income.
Keywords:
accruals
investment
working capital efficiency

Journal

J
Journal of Business Finance & Accounting
IF:
2.4
Papers:
51
Citations:
0

Organization

C
City University of New York
Scholars:
198
Papers: 125
Citations: 0
B
baruch college
Scholars:
4
Papers: 4
Citations: 0
W
washington university
Scholars:
394
Papers: 147
Citations: 0
researcher View more organizations
Cited Papers

Cited Papers

No cited papers available