Behaviour of Australian corporate treasurers around the global financial crisis

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The management and control of working capital, a function of corporate treasurers, is of paramount importance for a company’s financial health. Efficient working capital management is conducive to the avoidance of potential financial difficulties. Poor working capital management may lead to financial distress, which boosts the probability of bankruptcy and the lessons learnt from the global financial crisis (GFC) emphasize the importance of working capital management. RMIT University studied the behaviour of corporate treasurers around the GFC period. More specifically they studied the effect of various behavioural biases (overconfidence, anchoring, representativeness, self-serving, and loss aversion) on the management of cash, inventory, accounts receivable, accounts payable and risk. The purpose of this article is to summarize and report the findings of this study.


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