Analysis of Corporate Efficiency and Shareholder Return
Open Access
Author:
Knoll, Ryan E
Area of Honors:
Finance (Behrend)
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
Michael Greg Filbeck, Thesis Supervisor Michael Greg Filbeck, Thesis Honors Advisor Xin Zhao, Faculty Reader
Keywords:
Working Capital Working Capital Management Corporate Efficiency
Abstract:
Since 1996, CFO Magazine has published a list of 1,000 companies in its “Working Capital Scorecard.” In this paper, we examine the cumulative performance of companies’ stock for a six-year period. We analyze their performance against the S&P 500 index and on a risk-adjusted basis. We find a statistically significant difference in the returns of the whole sample portfolio as well as the top 25 percent of the working capital efficient companies, showing higher returns for a potential investor. We find no clear patterns which serve as a driver of the portfolio performance taking into account a possible announcement effect, firm size, book value, and stock price momentum.
