TY  - JOUR
TI  - Where to Find Value on the Balance Sheet
AU  - Chinloy, Peter
AU  - Imes, Matthew
AU  - Tang, Tilan
PY  - 2021
PB  - World Scientific Pub Co Pte Lt
LA  - eng
AB  - Firms with higher book equity relative to market capitalization earn a premium, leading to sorting into value and growth. This sorting implies that any balance sheet additions are risky. This paper provides evidence that what a firm holds on its balance sheet matters, and value occurs with high book-to-market ratios. Each holding relative to firm market capitalization has a risk premium, varying across holdings. Among US firms quarterly for 1980–2016, doubling holdings of cash and receivables relative to market capitalization earn premiums of at least 1%, as does taking on debt. These account for the entire value premium, since physicals, intangibles and payables are not risky. The value premium derives from the composition of the firm's assets.
UR  - https://doi.org/10.1142/s0219091521500090
DO  - 10.1142/s0219091521500090
T2  - Review of Pacific Basin Financial Markets and Policies
VL  - 24
IS  - 1
SN  - 0219-0915
SN  - 1793-6705
SP  - 2150009
UR  - https://www.pollux-fid.de/r/cr-10.1142/s0219091521500090
H1  - Pollux (Fachinformationsdienst Politikwissenschaft)
ER  -