Factors affecting company’s cash holding

Abstract

This study aims to analyze the factors affecting several companies' cash holdings. Some of the factors were net working capital (NWC), cash flow, capital expenditure, leverage, and market-to-book. The samples used in this study were 318 non-financial companies listed in the IDX in 2013-2017. The approach used was a quantitative approach with the linear regression method. The result of the study was that net working capital (NWC), capital expenditure, and leverage had a negative significant effect on cash holding. On the other hand, cash flow had a positive significant effect on cash holding, and market-to-book did not have any effect on cash holding.

Corporate Governance In Cash Management, Net Working Capital, And Cash Holding

“…This research supports the research results of (Amalia et al, 2018;Liadi and Suryanawa, 2018), who found that determining the amount of cash holding is not affected by the company's capital expenditures. This research contrasts with the results of research by (Arfan et al, 2017;Guizani, 2017;Herlambang et al, 2019;Maheshwari and Rao, 2017;Serly and Melandy, 2021;Tayem, 2017), who find high levels of corporate capital expenditure will significantly reduce the amount of cash holding because it is used to finance capital expenditure. The results of this study have a direction that is contrary to the research of (Thu and Khuong, 2018;Trinh and Thuy Mai, 2016), who found that the amount of cash holding will increase as the company's capital expenditure increases.…”

“…This study obtained results that support the research of (Herlambang et al 2019;Maheshwari and Rao, 2017;Serly and Melandy, 2021;Tayem, 2017), namely the greater the net working capital, the smaller the amount of cash holding. However, this research is not in line with the research of (Astuti et al, 2019;Jebran et al, 2019;Juardi et al, 2021;Liadi and Suryanawa, 2018;Wulandari and Setiawan, 2019) who get an increase in net working capital will increase the amount of cash holding.…”

“…Urgent capital expenditures can still be made if these expenditures can increase the company's competitiveness. (Arfan et al, 2017;Guizani, 2017;Herlambang et al, 2019;Maheshwari and Rao, 2017;Serly and Melendy, 2021;Tayem, 2017) find that high levels of corporate capital expenditure will reduce the amount of cash holding because it is used to finance capital expenditure. (Thu and Khuong, 2018;Trinh and Thuy Mai, 2016) Found contradictory results, namely, the amount of cash holding will increase as the company's capital expenditure increases.…”

“…Therefore, the greater the value of the net working capital owned by the company, the lower the amount of cash in the hands of the company. (Herlambang et al, 2019;Maheshwari and Rao, 2017;Serly and Melandy, 2021;Tayem, 2017) Conducted research on the relationship/influence of the level of net working capital on the amount of cash holding. The results of their research found that the greater the net working capital, the smaller the amount of cash holding.…”

Faktor-Faktor Yang Memengaruhi Nilai Perusahaan

“…Perusahaan dengan pengelolaan cash yang baik akan lebih mudah dalam memenuhi biaya operasional hingga biaya tak terduga (Singh & Misra, 2019). Cash holdings menjadi hal penting karena besaran cash yang dimiliki perusahaan menandakan kemampuan perusahaan dalam memenuhi kewajiban (Herlambang et al, 2019).…”