Cash Flow Management and Manufacturing Firm Financial Performance: A Longitudinal Perspective

A firm\u27s cash flow policies, which manage working capital in the form of cash receivables from customers, inventory holdings, and cash payments to suppliers, are inexorably linked to the firm\u27s operations. Building on earlier research, this study: (i) extends prior studies by examining the relationships between changes in cash flow measures and changes in firm financial performance using a longitudinal sample of firm data; and (ii) investigates the direction of the relationship between quarterly changes in cash flow positions and firm financial performance. This study is conducted using the Generalized Estimating Equations (GEE) methodology to analyze a longitudinal sample of eight quarters of cash flow and financial performance data from 1233 manufacturing firms. The analyses find that changes in the widely used Cash Conversion Cycle (CCC) metric do not relate to changes in firm performance; however, changes in the less used Operating Cash Cycle (OCC) metric are found to be significantly associated with changes in Tobin\u27s q. This examination of how changes in specific cash flow measures relate to changes in Tobin\u27s q shows that both reductions in Accounts Receivables (measured as Days of Sales Outstanding [DSO]) and reductions in Inventory (measured as Days of Inventory Outstanding [DIO]) relate to firm financial performance improvements that persist for several quarters. Endogeneity tests of whether a firm\u27s cash flow management strategy leads to changes in firm performance or if the cash flow strategy is a byproduct of firm performance suggest that reductions in DSO lead to improved firm financial performance

An Exploration of ‘Sticky’ Inventory Management in the Manufacturing Industry

Traditional models examining relationships between firm resources and revenues assume that the many expenses and asset holdings change in proportion to changes in demand. However, research has found that for many costs and assets assumed to be variable, the magnitude of a change in a cost or asset in proportion to a change in revenue is smaller during periods when revenue decreases compared to the change in the cost or asset when revenue increases. Costs and assets which behave in this manner have been denoted as ‘sticky’ costs or assets. This study examines if inventory in the manufacturing industry is managed in a ‘sticky’ manner and what implications inventory stickiness has on firm performance. Utilising firm panel data over a 25-year time window we find that inventory stickiness does exist amongst manufacturers and that it has negative implications for firm performance

The Operational Impacts of Chief Supply Chain Officers in Manufacturing Firms

Many firms have elevated their supply chain management decision-making responsibilities through the creation of ‘Chief Supply Chain Officer’ (CSCO) positions. This is widely attributed to the recognition that superior supply chain operations can generate a competitive advantage. Prior studies have found that firms with CSCOs outperform firms without CSCOs along many financial dimensions. However, these prior efforts did not examine the pathways by which these improvements occur. This study addresses this gap in the literature by investigating whether supply chain characteristics of manufacturing firms differ within firms with CSCOs. To explore this, we investigate the relationship between CSCOs and operational dimensions of supply chain performance using data from the 10-year period between 2008 and 2017. We find that the presence of a CSCO in a firm is associated with shorter cash conversion cycles, lower levels of operational slack, and larger buffers of inventory during periods of high market instability

Do Online Consumers Value Corporate Social Responsibility More in Times of Uncertainty?: Evidence from Online Auctions Conducted During the Onset of the COVID-19 Pandemic

The relationships between Corporate Social Responsibility (CSR) and consumer behaviors have been widely explored in the literature. From the consumer standpoint, it has been shown that individuals largely want to be socially responsible actors and that, more than ever, they consider the CSR aspects of products or services when contemplating purchasing decisions. We utilize data from 23,247 online auctions conducted before and during the COVID-19 pandemic to analyze in what way consumer preferences might be influenced by how the CSR characteristics of products are touted in their descriptions. We find that a greater CSR emphasis is positively associated with an increased prospect of an online auction item selling. Additionally, we find CSR is valued more by consumers during a period of economic hardship and social uncertainty (COVID-19). Finally, we find that profit-seeking behaviors by intermediary auction house brokers undermine the effect of CSR on consumer purchasing behavior

A Newsvendor Approach to Compliance and Production under Cap and Trade Emissions Regulation

Since the 1990s, governmental agencies have increasingly turned to market based cap and trade programs to control the emission of pollutants. Firms subject to cap and trade regulation are typically required to acquire emissions allowances via open auction markets. The cost to acquire allowances may impose a substantial financial burden on a firm. While emissions reduction efforts may eliminate some firm\u27s need to acquire additional allowances, there are still numerous firms that need to purchase additional allowances on the open market. This study presents a new forward buying heuristic, designed for those firms that need to purchase emissions allowances via auctions, which reduces the impact of emissions allowance acquisitions on the firms\u27 financial performance. The heuristic, designated as the Newsvendor Production Planning with Emissions Allowance Forward Buying (NPPAFB) method, applies a forward buying algorithm to determine the number of periods for which to forward buy allowances, the current production order up to level, and the current and future emissions allowance requirements (which serves as the order up to level for allowance purchases). Additionally, NPPAFB also authorizes unused emissions allowances to be sold when market conditions are favorable. Compared against three existing production planning and allowance procurement strategies, a simulation exercise finds that the NPPAFB method significantly reduces a firm\u27s emissions allowance expenditures. These results indicate that heuristic can be readily adopted by any firm that is required to procure emissions allowances via open markets in an effort to improve the firm\u27s profitability

Absent B Cells, agammaglobulinemia, and Hypertrophic Cardiomyopathy in Folliculin-interacting Protein 1 Deficiency

Agammaglobulinemia is the most profound primary antibody deficiency that can occur due to an early termination of B-cell development. We here investigated 3 novel patients, including the first known adult, from unrelated families with agammaglobulinemia, recurrent infections, and hypertrophic cardiomyopathy (HCM). Two of them also presented with intermittent or severe chronic neutropenia. We identified homozygous or compound-heterozygous variants in the gene for folliculin interacting protein 1 (FNIP1), leading to loss of the FNIP1 protein. B-cell metabolism, including mitochondrial numbers and activity and phosphatidylinositol 3-kinase/AKT pathway, was impaired. These defects recapitulated the Fnip1-/- animal model. Moreover, we identified either uniparental disomy or copy-number variants (CNVs) in 2 patients, expanding the variant spectrum of this novel inborn error of immunity. The results indicate that FNIP1 deficiency can be caused by complex genetic mechanisms and support the clinical utility of exome sequencing and CNV analysis in patients with broad phenotypes, including agammaglobulinemia and HCM. FNIP1 deficiency is a novel inborn error of immunity characterized by early and severe B-cell development defect, agammaglobulinemia, variable neutropenia, and HCM. Our findings elucidate a functional and relevant role of FNIP1 in B-cell development and metabolism and potentially neutrophil activity

Bacterial community development in experimental gingivitis.

Current knowledge of the microbial composition of dental plaque in early gingivitis is based largely on microscopy and cultural methods, which do not provide a comprehensive description of oral microbial communities. This study used 454-pyrosequencing of the V1-V3 region of 16S rRNA genes (approximately 500 bp), and bacterial culture, to characterize the composition of plaque during the transition from periodontal health to gingivitis. A total of 20 healthy volunteers abstained from oral hygiene for two weeks, allowing plaque to accumulate and gingivitis to develop. Plaque samples were analyzed at baseline, and after one and two weeks. In addition, plaque samples from 20 chronic periodontitis patients were analyzed for cross-sectional comparison to the experimental gingivitis cohort. All of the healthy volunteers developed gingivitis after two weeks. Pyrosequencing yielded a final total of 344,267 sequences after filtering, with a mean length of 354 bases, that were clustered into an average of 299 species-level Operational Taxonomic Units (OTUs) per sample. Principal coordinates analysis (PCoA) plots revealed significant shifts in the bacterial community structure of plaque as gingivitis was induced, and community diversity increased significantly after two weeks. Changes in the relative abundance of OTUs during the transition from health to gingivitis were correlated to bleeding on probing (BoP) scores and resulted in the identification of new health- and gingivitis-associated taxa. Comparison of the healthy volunteers to the periodontitis patients also confirmed the association of a number of putative periodontal pathogens with chronic periodontitis. Taxa associated with gingivitis included Fusobacterium nucleatum subsp. polymorphum, Lachnospiraceae [G-2] sp. HOT100, Lautropia sp. HOTA94, and Prevotella oulorum, whilst Rothia dentocariosa was associated with periodontal health. Further study of these taxa is warranted and may lead to new therapeutic approaches to prevent periodontal disease.BBSRC Industrial Case Studentship ref no. BB/G01714X/1 in collaboration with GlaxoSmithKline

The human DEK oncogene regulates DNA damage response signaling and repair

The human DEK gene is frequently overexpressed and sometimes amplified in human cancer. Consistent with oncogenic functions, Dek knockout mice are partially resistant to chemically induced papilloma formation. Additionally, DEK knockdown in vitro sensitizes cancer cells to DNA damaging agents and induces cell death via p53-dependent and -independent mechanisms. Here we report that DEK is important for DNA double-strand break repair. DEK depletion in human cancer cell lines and xenografts was sufficient to induce a DNA damage response as assessed by detection of γH2AX and FANCD2. Phosphorylation of H2AX was accompanied by contrasting activation and suppression, respectively, of the ATM and DNA-PK pathways. Similar DNA damage responses were observed in primary Dek knockout mouse embryonic fibroblasts (MEFs), along with increased levels of DNA damage and exaggerated induction of senescence in response to genotoxic stress. Importantly, Dek knockout MEFs exhibited distinct defects in non-homologous end joining (NHEJ) when compared to their wild-type counterparts. Taken together, the data demonstrate new molecular links between DEK and DNA damage response signaling pathways, and suggest that DEK contributes to DNA repair

Preventing intrusive memories after trauma via a brief intervention involving Tetris computer game play in the emergency department: a proof-of-concept randomized controlled trial.

After psychological trauma, recurrent intrusive visual memories may be distressing and disruptive. Preventive interventions post trauma are lacking. Here we test a behavioural intervention after real-life trauma derived from cognitive neuroscience. We hypothesized that intrusive memories would be significantly reduced in number by an intervention involving a computer game with high visuospatial demands (Tetris), via disrupting consolidation of sensory elements of trauma memory. The Tetris-based intervention (trauma memory reminder cue plus c. 20 min game play) vs attention-placebo control (written activity log for same duration) were both delivered in an emergency department within 6 h of a motor vehicle accident. The randomized controlled trial compared the impact on the number of intrusive trauma memories in the subsequent week (primary outcome). Results vindicated the efficacy of the Tetris-based intervention compared with the control condition: there were fewer intrusive memories overall, and time-series analyses showed that intrusion incidence declined more quickly. There were convergent findings on a measure of clinical post-trauma intrusion symptoms at 1 week, but not on other symptom clusters or at 1 month. Results of this proof-of-concept study suggest that a larger trial, powered to detect differences at 1 month, is warranted. Participants found the intervention easy, helpful and minimally distressing. By translating emerging neuroscientific insights and experimental research into the real world, we offer a promising new low-intensity psychiatric intervention that could prevent debilitating intrusive memories following trauma