The Study of the Relationship Between Cash Holding Levels and Influencing Factors in Companies Listed on the Tehran Stock Exchange with an Emphasis on Financial Crises.

Document Type : Original Article

Authors

• Amin Khalili ¹
• Hossein Jabari ²
• Ali Akbar Farzinfar ²
• Hamid Reza Vakilifard ³
• Hossein Panahian ⁴

¹ PhD student, Department of Industrial Management - Finance, Kashan Branch, Islamic Azad University, Kashan, Iran.

² Assistant Professor, Department of Accounting, Kashan Branch, Islamic Azad University, Kashan, Iran.

³ Associate Professor, Accounting Department, Science and Research Unit, Islamic Azad University, Tehran, Iran.

⁴ Full Professor of Financial Management, Kashan Branch, Islamic Azad University, Kashan, Iran

Abstract

Objective/Main Question: The aim of the present research is to provide a model to determine the relationship between cash holding levels and influencing factors with an emphasis on financial crises.

Research Method: This study utilized multivariate regression methods (panel data - fixed effects). The statistical population includes all companies listed on the Tehran Stock Exchange. To select the sample size, a systematic elimination sampling method (screening) was employed, and ultimately, 144 companies were analyzed over a 7-year period from 2017 to 2023 (a total of 1008 firm-years).

Findings: According to the results, the market value of the companies' stocks is nearly three times their book value. There is a positive correlation between the cash-to-total-assets ratio and growth opportunity variables, while a negative correlation exists between the cash-to-total-assets ratio and the operating cash flow ratio. In companies with higher fixed assets, the effect of financial crises and a higher operating cash flow ratio are associated with a lower cash-to-total-assets ratio. Additionally, the accumulated model was deemed suitable for estimating the initial model of the research, and the absence of heteroscedasticity was confirmed. Overall, there is a significant relationship between cash holding levels and other variables during financial crises, which supports the research hypotheses.

Discussion and Conclusion: During financial crises, a significant relationship exists between cash holding levels and influencing factors, such that companies with higher fixed assets and greater operating cash flow ratios have a lower cash-to-total-assets ratio.

Keywords

• Cash holding
• financial crisis
• cash flow
• stock companies

Main Subjects

• Economic and financial markets

---