英文摘要 |
This study aims to employ two financial indicators, days sales outstanding and days payable outstanding, as the proxy variables for customer relationship strength and supplier relationship strength respectively to explore whether these two strengths have impacts on companies’ short term liquidity. Our regression analysis findings show that the stronger the customer relationship is, the significantly weaker the cash flow ratio and the significantly shorter the days sales of inventory will be. However, the combined effect of shorter days sales of inventory and longer days sales outstanding results in insignificantly lower quick ratio. On the other hand, our findings also show that the stronger the supplier relationship is, the significantly longer the days sales of inventory will be, due to the excessive purchases. This current liability expanded effect will also inevitably weaken both quick ratio and cash flow ratio. As such, our research findings highlight the crucial role of capital adequacy for companies which pursue stronger customer and supplier relationships to build up their sustainable competitive advantage. |