Cash is king for companies facing hard times

The study, which polled more than 1,000 chief financial officers globally in December, found companies were cutting off investment projects, selling real estate, and drawing down credit lines at their bank just in case they need the cash.

Almost 86 percent of CFOs at financially constrained companies said they were unable to pursue value-enhancing projects because they lacked external funds, and 70 percent said they were selling off more assets now than before, despite the difficult market conditions.

"Firms are in survivor mode right now, and to maximize your chance of surviving this thing, you need cash," said Campbell Harvey, one of the Duke professors who ran the study.

One of the first things to go is inventory, since it is among the easiest things to sell, Harvey said.

Liquidity Services Inc which runs the retail inventory auction website Liquidation.com, said struggling retailers are paying much closer attention to their inventory levels.

Volume on the website was eight times above 2007 levels even before Christmas last year, as retailers sent goods straight to auction to raise cash, without even trying to sell them on their shelves.

"People are battening down the hatches, looking forward in a more thoughtful way, and are trying to proactively manage their cash," said Lisa Donahue, head of restructuring at turnaround firm AlixPartners. "Arguably it should have been a discipline all along, but when there's ample liquidity in the market it isn't necessarily top of mind."

(Reporting by Emily Chasan; Editing by Gary Hill)