Table 1 Variables definitions
Variables | Symbol | Measurement | Expected sign |
|---|---|---|---|
Cash and cash equivalents | CASH | Cash and cash equivalents divided by total assets | |
Cash flow ratio | CF | Pre-tax profit plus depreciation and amortization divided by total assets | + |
Capital expenditure | CAP | Change in fixed assets plus depreciation divided by total assets | – |
Growth | G | Percentage change in total assets | + |
Leverage | LEV | Total liabilities divided by total assets | +/− |
Liquidity | LIQ | Net working capital less cash divided by total assets | – |
Size | SIZE | The natural logarithm of total assets | +/− |
Tangibility | TANG | Tangible fixed assets divided by total assets | – |
Volatility | VOL | The standard deviation of cash flow divided by total assets | + |