期刊名称：Asian Academy of Management Journal of Accounting and Finance
印刷版ISSN：1823-4992
电子版ISSN：2180-4192
出版年度：2020
卷号：16
期号：2
页码：179-207
DOI：10.21315/aamjaf2020.16.2.8
语种：English
出版社：Universiti Sains Malaysia
摘要：This research investigates the opportunity cost as an indirect cost of fnancial distress from two perspectives. First, indirect cost is estimated using multi-stage fnancial distress and non-linear proxy of debt. Second, receivable and inventory management are studied as determinants of indirect cost. The sample includes ongoing Pakistani frms that were healthy in the previous year and documenting positive gross proft. Results showed that frms bear opportunity loss primarily due to leverage rather than multistage fnancial distress. However, a non-linear relationship is found between leverage and indirect cost. Results further explored the impact of multistage financial distress on internal operations, i.e., working capital policies. It is found that firms manage receivable and inventory simultaneously during the multistage fnancial distress. Results revealed that increasing receivables and decreasing inventory is suitable during the transition of healthy frms to initial stage of fnancial distress, i.e., proft reduction. However, decreasing receivables, along with holding more inventory, is recommended for healthy frms that face liquidity problems subsequently. It is concluded that managers can reduce the indirect cost after deploying the optimal debt ratio and recommended receivable and inventory management policies.
关键词：Opportunity loss;fnancial d istress;c apital s tructure;r eceivable;inventory;Pakistan;developing countries
