Design/methodology/approachThe authors employ sorting, and various regression methods and adjust the Faulkender and Wang (2006) model to test two hypotheses. FindingsThe authors find a negative relation between managerial risk-taking incentives (vega) and accounts receivable and a negative relation between vega and the market value of accounts receivable to shareholders. Research limitations/implicationsThe authors do not compare PPE investment, external financing with accounts receivable to figure out whether accounts receivable is better and more efficient to adjust.