Proxy Variables

Definitions

Predicted Sign

CCP

Accounts receivables divided by sales and multiplied by 365 days

+/−

CPP

Accounts payables divided by cost of goods sold and multiplied by 365 days

+/−

CRA

current assets divided by current liabilities

+/−

IVP

Inventory divided by cost of goods sold and multiplied by 365 days

+/−