Cash Conversion Cycle and Firms’ Performance: An Empirical Study for the Greek Listed Firms in the Athens Stock Exchange

It is commonly accepted that economic crisis has a negative effect on firms’ liquidity. Therefore, liquidity management has become critical for firms, in order to be able to pay their short-term debts. Cash conversion cycle is used in order to measure the average collection period and days of sales in inventories less days of payables outstanding (Keown et al., Foundations of finance: The logic and practice of Financial management. Upper Saddle River, NJ: Prentice Hall, 2003). The main purpose of this study is to explore the relationship between cash conversion cycle and firms’ financial performance in the era of financial crisis. For this purpose, we selected a sample of listed firms in the Athens Stock Exchange for the years 2012–2014, and using OLS regression, we investigated the impact of CCC on firms’ size. Our findings differ from those of relevant studies which explored firms in the periods before the financial crisis or firms of countries which have not been significantly affected by the financial crisis.