This thesis investigates the determinants of UK corporate cash holdings between 1980 and 2012. The global and long term phenomenon of corporate cash pilling has drawn significant attention from researchers. Similarly, this study aims at shedding light on the empirical relationship between cash holding and specific firm characteristics. Our preliminary research incorporates a comprehensive literature review. Towards this end, the relevant financial theory is presented and the previous empirical studies are highlighted. Afterwards, the expected results of our research are synthesized into a set of distinct hypotheses and tested with regression analysis. The empirical findings suggest that cash holdings are positively related to investment opportunity, as R&D and market to book ratio. Cash ratio is also positively related to industry cash flow volatility and negatively affected by cash flow, net working capital, capital expenditures, leverage, tax expenses, age and size. Regarding the development of the determinants of cash holdings, the study indicates that three major variables influenced cash holdings over the years of analysis. In particular, leverage, tax regime and capital expenditures significantly affect the corporate liquidity in UK market. Furthermore, the results suggest that cash holdings are mostly defined by trade off theory. Indeed, our findings offer stimulating insights on the factors that determine the firms’ cash holdings during the past three decades. These findings may be beneficial for financial managers, investors and consultants. / Στην παρούσα διατριβή εξετάζονται οι προσδιοριστικοί παράγοντες του δείκτη μετρητών σε επιχειρήσεις του Ηνωμένου Βασιλείου μεταξύ των ετών 1980 και 2012. Η διακράτηση μετρητών αποτελεί παγκόσμιο φαινόμενο και λαμβάνει της ανάλογης προσοχής από πληθώρα ερευνητών. Σε αυτή τη βάση, η μελέτη αυτή έχει ως στόχο να ρίξει φως σχετικά με την εμπειρική σχέση μεταξύ του δείκτη μετρητών και τα συγκεκριμένα χαρακτηριστικά που επηρεάζουν την ρευστότητα στις επιχειρήσεις διαχρονικά. Αρχικά η έρευνα ενσωματώνει μια βιβλιογραφική ανασκόπηση. Προς το σκοπό αυτό, οι σχετικές οικονομικές θεωρίες και οι προηγούμενες εμπειρικές μελέτες παρουσιάζονται. Στη συνέχεια, τα αναμενόμενα αποτελέσματα της έρευνας συντίθενται σε ένα σύνολο διακριτών υποθέσεων και δοκιμάζονται με ανάλυση παλινδρόμησης. Τα εμπειρικά ευρήματα υποδηλώνουν ότι ο δείκτης μετρητών σχετίζεται θετικά με τις επενδυτικές ευκαιρίες, τις δαπάνες Ε&Α και τον λόγο της αγοραίας προς τη λογιστική αξία των βιβλίων της επιχείρησης. Ο δείκτης μετρητών επίσης, σχετίζεται θετικά με την μεταβλητότητα των ταμειακών ροών του κλάδου και επηρεάζεται αρνητικά από τις ταμειακές ροές, το καθαρό κεφάλαιο κίνησης, τις κεφαλαιακές δαπάνες, την μόχλευση, τα φορολογικά έξοδα, την ηλικία και το μέγεθος των επιχειρήσεων. Όσον αφορά την εξέλιξη των προσδιοριστικών παραγόντων των ταμειακών ρευστών διαθεσίμων, η μελέτη δείχνει ότι τρεις είναι οι κύριες μεταβλητές που επηρεάζουν τη διακράτηση μετρητών κατά τη διάρκεια των χρόνων της ανάλυσης. Ειδικότερα, η μόχλευση, το φορολογικό καθεστώς και τις κεφαλαιακές δαπάνες επηρεάΖουν σημαντικά την απόφαση για εταιρική ρευστότητα στην αγορά του Ηνωμένου Βασιλείου. Επιπλέον, τα αποτελέσματα δείχνουν ότι η διακράτηση μετρητών ακολουθεί κυρίως την trade off θεωρία. Πράγματι, τα ευρήματά προσφέρουν χρήσιμες γνώσεις σχετικά με τους παράγοντες που καθορίζουν τη διακράτηση μετρητών των επιχειρήσεων κατά τη διάρκεια των τριών τελευταίων δεκαετιών. Τα ευρήματα αυτά μπορεί να είναι επωφελή για οικονομολόγους, επενδυτές και συμβούλους.

Firms that face seasonal demand account for an important fraction of the U.S. economy. However, there is surprisingly little evidence on these firms' financing decisions. Yet, studying these decisions provides a natural setting to shed light on the types of capital (i.e. cash or debt) that firms use to manage short-term financing needs. Using seasonal firms as a setting to examine this issue, I show that seasonal financing needs are met with debt with low exposure to information asymmetry, such as short-term debt and trade credit. I further show that cash reserves, which have high carrying costs and can at time lead to agency problems, are not used for seasonal financing needs. Further, as financial flexibility theory would predict, I document that seasonal firms maintain more conservative financial policies to increase the ability to use debt for short-term financing needs. Specifically, seasonal firms are less levered and have long-term debt with a longer average maturity. Further, seasonal firms adjust toward leverage targets slower during fiscal quarters when debt is used for short-term financing. Overall, my findings indicate that firms minimize costs associated with short-term financing needs by using debt with low issuance costs and the use of this debt impacts the overall capital structure of the firm.

I explore the passage of wrongful discharge laws by U.S. state courts that allow workers to sue employers for unjust dismissal as an exogenous increase in employee firing costs. I find that firms reduce debt ratios following the adoption of these laws, and this result is strongest for subsamples of firms that experience larger increases in expected firing costs. Following the passage of these laws, firms also increase cash holdings, firms save more cash out of cash flows, and investors place a higher value on each additional dollar of cash holdings. Overall, my results indicate that employee firing costs can have an important impact on corporate financial policy decisions.

I examine the information content of unrealized cash flow hedge gains/losses for future profitability and stock returns. An unrealized gain on a cash flow hedge suggests that the price of the underlying hedged item (i.e. commodity price, foreign currency exchange rate or interest rate) moved in a direction that negatively affects the firm. Based on this inverse relation, I find that unrealized cash flow hedge gains/losses are negatively associated with future gross margin. This association is weaker for firms that have the ability to pass input price changes through to customers. Finally, I find that investors do not immediately price the information conveyed by cash flow hedges. Instead, investors appear surprised by future realizations of gross margin, consistent with the view that a lack of transparent disclosure on future hedged transactions leads to a delay in pricing. These results may inform current policy decisions of both the FASB and SEC.

No description available.

In this thesis, I examine the factors associated with analysts’ voluntary practice of issuing cash flow forecasts and earnings forecasts on the same day. I draw on Hughes and Pae’s (2004) management partial disclosure equilibrium and predict how an analyst decides to issue a cash flow forecast revision along with and according to her bad news and good news earnings forecast revision. In particular, I predict that analysts strategically choose to supplement earnings forecasts with positive cash flow news when they deliver bad news earnings forecasts. Consistent with my prediction, I find that analysts are more likely to issue cash flow forecast revisions in the opposite direction to their earnings forecast revisions when they issue downward earnings forecast revisions than when they issue upward earnings forecast revisions. The results suggest that analysts may not make their decisions to issue cash flow forecasts as objectively as they ought to do in their role as independent information intermediaries. Rather, analyst decisions to issue cash flow forecasts are akin to managers’ strategic decisions to voluntarily disclose supplemental information to affect investors’ confidence in their primary news (earnings forecasts). / Thesis (Ph.D, Management) -- Queen's University, 2009-05-27 16:20:09.248

Objective: The objective is to examine if long terms of payment are created because of a perceived zero-sum game in the cash-to-cash cycles between companies. The study will also examine if dependence effects the dependent companies Cash-to-Cash-cycle because of long terms of payment. Scientific method: The study uses a qualitative and a quantitative method, where primary data is collected from semi-structured interviews. Additional primary data is collected from an unstructured interview with an expert in the field of which is examined. Additional data has been collected from the studied companies’ annual reports. Theoretical references: The primary theory has been Game theory, where the researchers have used this theory to analyze the behaviors of the companies. This theory has been reinforced by the theory Pareto efficiency to help analyze the strategy which gives the highest net-outcome. The theory Cash-to- Cash has also been a focal point in the study, which has been used in concert with Supply chain finance and Supply chain management. This has been done to be able to further analyze the behaviors of the companies and the cooperation in the “supply chain”. Result: The result shows that there seems to exist a perceived zero-sum game in the cash-to-cash cycles between companies. The consequence of this is that the companies in a dominant position use a strategy that prolongs payables outstanding and shortens accounts receivables. This in turn prolongs the cash-to- cash cycles for the dominant companies suppliers. Focus to improve the Cash-to-Cash-cycles for both companies is very small or non-existent. The authors want to emphasize that additional research is needed within this area, where other contributing factors can be effecting the company’s decisions. / Syfte: Studien syftar till att undersöka om ofördelaktiga betalningsvillkor skapas på grund av ett uppfattat nollsummespel inom Cash-to-Cash-cykler mellan företag. Studien syftar även till att undersöka om beroendeförhållanden påverkar beroende aktörers Cash-to-Cash-cykel på grund av ofördelaktiga betalningsvillkor. Metod: Studien använde en metodtriangulering, där primärdata samlades in via semistrukturerade intervjuer. Ytterligare primärdata samlades in via en ostrukturerad intervju med en expert inom området. Slutligen har data samlats in angående intervjuobjektens årsredovisning. Teoretisk referensram: Den primära teorin har varit Game theory, där forskarna använt teorin för att kunna analysera aktörernas beteenden. Denna teori har förstärkts av ytterligare teorier såsom Paretooptimalitet som hjälper att analysera utfall som ger högst möjlig nytta. Teorier angående Cash-to-Cash har även de varit centrala i arbetet som har kopplats till Supply chain management samt Supply chain finance för att ytterligare kunna analysera beteenden och data angående samarbeten i kedjor av aktörer. Resultat: Resultatet visar att det verkar finnas ett uppfattat nollsummespel inom cash-to-cash-cykeln mellan företagen. Detta leder till att aktörer med maktpositioner utgår från en strategi som innebär att förlänga betaltiderna för leverantörer, som då förlänger leverantörernas Cash-to-Cash-cykel. Fokus på att förbättra Cash-to-Cash-cyklerna mellan företagen är väldigt liten eller obefintlig. Författarna vill dock tydliggöra att ytterligare forskning kring ämnet behövs för att kunna säkerställa resultatet, då andra faktorer kan ha påverkat aktörernas beslut och beteenden.

The primary objective of any corporation should be shareholder wealth maximisation. A firm's working capital policies have an effect on the firm's expected future returns and the risk associated with the returns, which ultimately have an impact on shareholder wealth. Efficient working capital management is a fundamental portion of the overall corporate strategy to create shareholder value. In this study the relationship of corporate profitability and working capital management was investigated. This relationship is examined using regression analysis. A sample of 118 firms listed on the Johannesburg Securities Exchange (JSE) for the period 2003 to 2007 was used. The purpose of this study is to establish whether a relationship exists between working capital management efficiency and profitability, considering the cash conversion cycle and operating profitability of the firm. The results of the regression analysis indicated that a statistical significance exists for three of the five years (2003 - 2005) analysed between profitability, measured with the gross operating profit, and the cash conversion cycle. It is observed (2003-2005 regression results) that a lower gross operating profit is associated with an increase in number of days accounts payable. The negative relationship between accounts receivable and firms' profitability (for 2003-2005) suggests that less profitable firms will pursue a decrease of accounts receivables in the attempt to reduce cash gap in the respective cash conversion cycles. The negative relationship between the number of days inventory and corporate profitability (for 2003-2005) suggests that a sudden decrease in sales accompanied by mismanagement of inventory, will lead to tying up excess capital at the expense of profitable operations. Managers or owners of firms can improve profits for firms by handling correctly the cash conversion cycle and keeping each individual component (accounts receivable, accounts payable and inventory) to an optimum level. These results (for 2003-2005) suggest that managers can create value for shareholders by reducing the cash conversion cycle and its individual components. / Thesis (M.B.A.)--North-West University, Potchefstroom Campus, 2009.

The primary objective of any corporation should be shareholder wealth maximisation. A firm's working capital policies have an effect on the firm's expected future returns and the risk associated with the returns, which ultimately have an impact on shareholder wealth. Efficient working capital management is a fundamental portion of the overall corporate strategy to create shareholder value. In this study the relationship of corporate profitability and working capital management was investigated. This relationship is examined using regression analysis. A sample of 118 firms listed on the Johannesburg Securities Exchange (JSE) for the period 2003 to 2007 was used. The purpose of this study is to establish whether a relationship exists between working capital management efficiency and profitability, considering the cash conversion cycle and operating profitability of the firm. The results of the regression analysis indicated that a statistical significance exists for three of the five years (2003 - 2005) analysed between profitability, measured with the gross operating profit, and the cash conversion cycle. It is observed (2003-2005 regression results) that a lower gross operating profit is associated with an increase in number of days accounts payable. The negative relationship between accounts receivable and firms' profitability (for 2003-2005) suggests that less profitable firms will pursue a decrease of accounts receivables in the attempt to reduce cash gap in the respective cash conversion cycles. The negative relationship between the number of days inventory and corporate profitability (for 2003-2005) suggests that a sudden decrease in sales accompanied by mismanagement of inventory, will lead to tying up excess capital at the expense of profitable operations. Managers or owners of firms can improve profits for firms by handling correctly the cash conversion cycle and keeping each individual component (accounts receivable, accounts payable and inventory) to an optimum level. These results (for 2003-2005) suggest that managers can create value for shareholders by reducing the cash conversion cycle and its individual components. / Thesis (M.B.A.)--North-West University, Potchefstroom Campus, 2009.

隨著2007年美國次貸危機爆發而引起的金融海嘯，對全球經濟造成了巨大的負面衝擊，至今仍還未完全恢復。在後金融海嘯時代下，企業從外部資本市場可獲得的融資往往較為困難，資本市場的流動性短缺成為常態，因此導致企業本身的資本累積更為重要。在此情況中，許多企業傾向於持有大量的現金及約當現金。 本研究旨在探討1992年至2012年間的美國企業之現金影響因子，並檢視各個現金持有影響因子對現金比率之影響方向，並把樣本分別以企業規模大小、有無財務限制和年度進行實證分析。 本研究實證指出在全體樣本的迴歸結果，可以發現影響美國企業現金持有比率的影響因子主要有：企業規模、負債比率、總資產報酬率、淨營運資金比率、研究發展費用佔淨銷售額比率、併購佔總資產比率、資本支出比率、市值對淨值比率與股利發放情形，只有現金流量比率不具顯著性。實證結果支持動機理論、融資順位理論和資訊不對稱理論，並符合預期之變動方向。