Abstract:

This research aims to explore the factors associated with the firm’s value in Mexico. A database is built with companies listed on the Mexican stock exchange during the period 2015 to 2019 to avoid the data from being influenced by the effect of COVID-19. Financial companies were excluded. Both cross-sectional and panel regression models were carried out in which the dependent variable is the firm value and the explanatory variables are some financial ratios. Total assets, asset turnover, net income, return on assets, and working capital ratio were significant positive in different models. On the other hand, the variables receivables days and cash conversion cycle were significant negative. It is concluded that adequate management of working capital has a relevant impact on the firm value. It is observed that an increase of one percent in receivable days decreases the firm value by up to 0.49 percent; and that a one percent increase in the cash conversion cycle decreases the company value by up to 0.63. It is concluded that both variables are value drivers of the value of the companies.

Keywords:

Firm value, working capital, receivable days, cash conversion cycle, Mexican stock exchange.

How to Cite:

José Carlos Rivera Ramírez, Hugo Briseño Ramírez and Alejandro Rodríguez Magaña. Identification of Factors Associated with Firm Value in the Mexican Stock Market. [ref]: vol.22.2024. available at: https://refpress.org/ref-vol22-a32/