The literature has not extensively examined the effects of the 2008 financial crisis on
the working capital management of U.S. enterprises. That economic turmoil may have
caused enterprises to encounter a lack of funds owing to the severe credit crunch, financial
constraints, poor liquidity, and other factors, thereby adversely affecting their working
capital management policies. This study thus investigates the effects of this global crisis on
the working capital management policy of U.S. enterprises using panel data regression with
fixed effects. Results reveal no significant effect on the cash conversion cycle (CCC),
implying that a financial crisis has no effect on the speed of working capital collection.
However, firms with relatively low current and quick ratios during and after a financial crisis
period should pay more attention to their liquidity management strategies or take actions
prior to the eruption of a crisis so as to prevent themselves from slipping into a liquidity
crisis that in turn weakens their financial situation and leads to financial difficulties.
