Determinants of Account Receivable and Its Optimal Level: An Empirical Test on Vietnamese Companies
Determinants of Account Receivable and Its Optimal Level: An Empirical Test on Vietnamese Companies

Summary/Abstract: This paper analyzes factors that affect account receivable management and it impact on business performance of Vietnamese listed companies. The research result shows that the introduction of a new variable for bad debts provision positively affects accounts receivable. As such, when the provision for bad debts increases and the profit of the company is reduced, the company intensifies the implementation of trade credit policy, leading to an increase in both receivables as well as revenue and profit. In addition, the research results show that there is an optimal level of account receivables for business performance. Specifically, if accounts receivables accounted for 24.98% of total assets, return on assets reaches the highest value and if receivables accounted for 25.15% of total assets, the Return on Equity achieves its highest value.

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