Analysis of Factors Affecting the Level of Cash Holdings on Non-Financial Companies
Keywords:
Cash Holding, Growth Opportunity, Networking Capital, Cash Conversion Cycle, Cash Flow, Firm Size
Abstract
The existence of cash in a company's financial balance sheet is an important component. Without cash, the company's activities will not be able to run. This research aims to analyze and provide empirical evidence regarding the influence of growth opportunity, net working capital, cash conversion cycle, cash flow, and firm size on cash holding in non-financial companies listed on the Indonesia Stock Exchange, Stock Exchange of Thailand and National Stock Exchange of India in 2018-2022. This research uses secondary data collected. The data used is non-financial company financial report data from 2018-2022. The sample for this research was taken using a purposive sampling technique, namely determining samples that met certain criteria so that 269 companies were used as samples in this research. The research data was then analyzed using Partial Least Square (PLS-SEM). Based on the test results using statistical tests, it shows that the growth opportunity and firm size variables have a significant negative effect on cash holding, the net working capital and cash flow variables have a significant positive effect, while the cash conversion cycle variable does not affect cash holding.
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References
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Shabbir, M., Hashmi, S. H., & Chaudhary, G. M. (2016). Determinants of corporate cash holdings in Pakistan. International Journal of Organizational Leadership, 5, 50-62.
Sugiharti, S. (2023). Strategies for Effective Talent Acquisition and Retention in Human Resource Management. Tec Empresarial, 18(2), 769-775.
Sugiharti, S., Budiyanto, B., & Suhermin, S. (2023). The Influence of Personality, Job Satisfaction and Quality of Work Life on Organizational Commitment and Their Impact on Employee Performance. Tec Empresarial, 18(2), 25-48.
Taswan, L. W. W., Nugroho, A. H. D., & Sudiyatno, B. (2023). Factors Influencing Non-Performing Loans: An Empirical Study on Commercial Banks in Indonesia. Journal of Hunan University Natural Sciences, 50(2).
Titman, S., & Wessels, R. (1988). The determinants of capital structure choice. The journal of Finance, 43(1), 1-19.
William, W., & Fauzi, S. (2013). Analisis Pengaruh Growth Opportunity, Net Working Capital, Dan Cash Conversion Cycle Terhadap Cash Holdings Perusahaan Sektor Pertambangan. Jurnal Ekonomi Dan Keuangan, 1(2), 14877.
Wulandari, E. A., & Setiawan, M. A. (2019). Pengaruh growth opportunity, net working capital, cash conversion cycle dan dividend payout terhadap cash holding. Jurnal Eksplorasi Akuntansi, 1(3), 1259-1274.
Zulhilmi, A. (2015). Pengaruh growth opportunity, net working capital, cash conversion cycle, dan leverage terhadap cash holding perusahaan. Universitas Islam Indonesia.
Alam, A., Baez, J. E., & Del Carpio, X. V. (2011). Does cash for school influence young women's behavior in the longer term? Evidence from Pakistan. Evidence from Pakistan (May 1, 2011). World Bank Policy Research Working Paper(5669).
Anjum, S., & Malik, Q. A. (2013). Determinants of corporate liquidity-An analysis of cash holdings. Journal of Business and Management, 7(2), 94-100.
Basheer, M. F. (2014). Impact of Corporate Governance on Corporate Cash Holdings: An empirical study of firms in manufacturing industry of Pakistan. International Journal of Innovation and Applied Studies, 7(4), 1371.
Bates, T. W., Kahle, K. M., & Stulz, R. M. (2009). Why do US firms hold so much more cash than they used to? The journal of finance, 64(5), 1985-2021.
Bigelli, M., & Sánchez-Vidal, J. (2012). Cash holdings in private firms. Journal of Banking & Finance, 36(1), 26-35.
Daher, M. (2010). The determinants of cash holdings in UK public and private firms. Department of Accounting and Finance, 14(2), 79-93.
Ferdinand, C. N. (2006). The naira-dollar exchange rate determination: a monetary perspective. In.
Ferreira, M. A., & Vilela, A. S. (2004). Why do firms hold cash? Evidence from EMU countries. European financial management, 10(2), 295-319.
Gill, A., & Shah, C. (2012). Determinants of corporate cash holdings: Evidence from Canada. International journal of economics and finance, 4(1), 70-79.
Hardiningsih, P., Srimindarti, C., Anggana Lisiantara, G., & Kartika, A. (2024). How does environmental, social, governance disclosure and political connection performance affect firm value? An empirical study in Singapore. Cogent Business & Management, 11(1), 2377764.
Harris, M., & Raviv, A. (1990). Capital Structure and the Informational Role of Debt. The journal of finance, 45(2), 321-349.
Jamil, S., Anwar, A., Afzaal, N., Tariq, A., & Asif, M. (2016). Determinants of corporate cash holdings: empirical analysis of Pakistani firms. IOSR Journal of Economics and Finance, 7(3), 29-35.
Jinkar, R. T. (2013). Analisa faktor-faktor penentu kebijakan cash holding perusahaan manufaktur di indonesia. Mini Economica, 42(1), 129-146.
Kartika, A., Indriyaningrum, K., Nurhayati, I., & Sudiyatno, B. (2022). Determinants of capital buffer: Study on conventional commercial Banks in Indonesia. European Journal of Business and Management Research, 7(2), 289-294.
Kartika, A., Sunarto, S., Rahman, F. R., & Machmuddah, Z. (2020). Determinants of capital structure and their effect to company’s value: study in LQ 45 companies listed in Indonesia stock exchange. Academic Journal of Interdisciplinary Studies, 9(3), 156-165.
Kartika, I., Sulistyo, H., Indriastuti, M., & Mutamimah. (2023). Good Corporate Governance and Firm Value: The Mediating Role of Internet Financial Reporting. Management and Accounting Review, 22(2), 123-147.
Limanta, V. N., & Malelak, M. I. (2017). Factors Affecting Corporate Cash Holding of FinanSector Companies (Non Bank) Listed in Indonesian Stock Exchange Period 2010-2015 Petra Christian University].
Megginson, W. L., & Wei, Z. (2010). Determinants and value of cash holdings: Evidence from China's privatized firms. 23rd Australasian Finance and Banking Conference,
Ogundipe, L. O., Ogundipe, S. E., & Ajao, S. K. (2012). Cash holding and firm characteristics: Evidence from Nigerian emerging market. Journal of Business Economics and Finance, 1(2), 45-58.
Opler, T., Pinkowitz, L., Stulz, R., & Williamson, R. (1999). The determinants and implications of corporate cash holdings. Journal of financial economics, 52(1), 3-46.
Ozkan, A., & Ozkan, N. (2004). Corporate cash holdings: An empirical investigation of UK companies. Journal of Banking & Finance, 28(9), 2103-2134.
Praptitorini, M. D., Kartika, A., Bhandari, R., Ratsameemonthon, C., Nasir, W. M. N. b. W. M., & Supriyadi, S. (2021). The Effect of Modified Audit Opinion on Borrowing Cash Flow And Investment Cash Flow on Non-Financial Companies. Indonesian Interdisciplinary Journal of Sharia Economics (IIJSE), 4(1).
Prasentianto, H. (2014). Analisis Faktor-Faktor Yang Mempengaruhi Tingkat. Cash Holding.
Rahmadhani, S., & Faisal, F. (2018). Corporate Social Environmental Responsibility Expenditure, Foreign Investment And Corporate Financial Performance Fifth International Conference on Governance and Accountability .
Rahmadhani, S., Faisal, F., Joseph, C., & Januarti, I. (2024). Corporate social responsibility and corporate investments: does research and development intensity matter? Cogent Business & Management, 11(1).
Rahmadhani, S., & Indriyani, R. (2019). Impact of Emissions Intensive Industries And Financial Distress On Voluntary Carbon Emission Disclosure. AKRUAL: Jurnal Akuntansi, 11(1).
Ristianawati, Y., Ghoniyah, N., & Hartono, S. B. (2021). Strategic Agility Diversification Investment: Islamic Financial Inclusion on the Financial Performance of Sharia Banks. Annals of the Romanian Society for Cell Biology, 2937–2945-2937–2945.
Rozak, H. A., Adhiatma, A., Fachrunnisa, O., & Rahayu, T. (2021). Social media engagement, organizational agility and digitalization strategic plan to improve SMEs’ performance. IEEE Transactions on Engineering Management, 70(11), 3766-3775.
Rozak, H. A., Fachrunnisa, O., Sugiharti, Taswan, & Fitriati, I. R. (2023). Metaverse and Modification Needs of Human Resources Management Practices and Policies: An Overview. International Conference on Intelligent Networking and Collaborative Systems,
Salim, N., Sugiharti, S., Bhandari, R., Nasir, W. M. N. b. W. M., Thongkamkaew, C., & Permatasari, P. (2022). Corporate social performance on cost of equity, cost of debt with institutional ownership, and bank dependency as moderating variables. Indonesian Interdisciplinary Journal of Sharia Economics (IIJSE), 5(1), 1087-1104.
Sekaran, P., Vijayakumari, F., Hariharan, R., Zachariah, K., Joseph, S. E., & Senthil Kumar, R. (2010). Community reintegration of spinal cord-injured patients in rural south India. Spinal Cord, 48(8), 628-632.
Shabbir, M., Hashmi, S. H., & Chaudhary, G. M. (2016). Determinants of corporate cash holdings in Pakistan. International Journal of Organizational Leadership, 5, 50-62.
Sugiharti, S. (2023). Strategies for Effective Talent Acquisition and Retention in Human Resource Management. Tec Empresarial, 18(2), 769-775.
Sugiharti, S., Budiyanto, B., & Suhermin, S. (2023). The Influence of Personality, Job Satisfaction and Quality of Work Life on Organizational Commitment and Their Impact on Employee Performance. Tec Empresarial, 18(2), 25-48.
Taswan, L. W. W., Nugroho, A. H. D., & Sudiyatno, B. (2023). Factors Influencing Non-Performing Loans: An Empirical Study on Commercial Banks in Indonesia. Journal of Hunan University Natural Sciences, 50(2).
Titman, S., & Wessels, R. (1988). The determinants of capital structure choice. The journal of Finance, 43(1), 1-19.
William, W., & Fauzi, S. (2013). Analisis Pengaruh Growth Opportunity, Net Working Capital, Dan Cash Conversion Cycle Terhadap Cash Holdings Perusahaan Sektor Pertambangan. Jurnal Ekonomi Dan Keuangan, 1(2), 14877.
Wulandari, E. A., & Setiawan, M. A. (2019). Pengaruh growth opportunity, net working capital, cash conversion cycle dan dividend payout terhadap cash holding. Jurnal Eksplorasi Akuntansi, 1(3), 1259-1274.
Zulhilmi, A. (2015). Pengaruh growth opportunity, net working capital, cash conversion cycle, dan leverage terhadap cash holding perusahaan. Universitas Islam Indonesia.
Published
2023-08-06
How to Cite
Rahmadhani, S., Taswan, T., Bhandari, R., Rusli, M. S. C., Astillero, M. R., Irawan, N., & Miftakhurniyati, M. (2023). Analysis of Factors Affecting the Level of Cash Holdings on Non-Financial Companies. Indonesian Interdisciplinary Journal of Sharia Economics (IIJSE), 6(3), 3527-3543. https://doi.org/10.31538/iijse.v6i3.5527
Section
Articles
Copyright (c) 2023 Sari Rahmadhani, Taswan Taswan, Rahul Bhandari, Muhamad Saufi Che Rusli, Marlon Rael Astillero, Nico Irawan, Miftakhurniyati Miftakhurniyati
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