In recent years, the world has been facing external factors such as the Covid-19 pandemic and Russia’s invasion of Ukraine. The results have led to a more unstable global situation and inflation levels have risen to higher levels, which has affected many companies negatively as higher costs and a worsen real value of money have impaired the purchasing power. Normally, a higher cash holding would mean that companies are more resilient to risky situations and turbulence on the market. In periods with higher inflation however, this can have the opposite effect as a larger amount of cash during periods of high inflation loses its real value. The purpose of this study is to study how companies choose to act during periods of high inflation levels compared to periods of low inflation levels, regarding their cash holdings. The purpose of the study has been to examine how the relationship between Scandinavian listed companies cash holdings looks like in relation to inflation, but also whether there are any differences in cash holdings between high and low inflation periods. Previous studies that have been done in this area have found a U-shaped relationship, which means that companies choose to reduce their cash holdings during periods of low inflation and increase their cash holdings during periods of high inflation to protect themselves against the risks that higher inflation entails. This study has found a similar relationship, where the only difference has been that cash holdings follow a constant increase with inflation through all inflation levels. When inflation reaches higher levels, however, it has been possible to see that companies choose to increase their cash holdings to higher levels than during previous periods with lower inflation rates. The reason why the results differ could be because the studies have been done in two separate parts of the world, but also because the studies have been done during two different time periods where this study has been done in periods where inflation has been unusually high due to the external world situation. In the future, it would’ve been interesting if studies were conducted in other parts of the world during the same time-period as this study, to see more clearly if the results would differ in comparison to other studies in the area. / Under de senaste åren har världen mötts av externa faktorer som Covid-19 pandemin och Rysslands invasion av Ukraina. Detta har resulterat i att omvärldsläget blivit mer instabilt och inflationsnivåerna har stigit till höga nivåer, vilket har påverkat många företag negativt då högre kostnader samt ett försämrat realvärde på pengar har försämrat köpkraften. I normala fall skulle ett högre kassainnehav innebära att företag är mer motståndskraftiga mot riskfyllda situationer och turbulens på marknaden. Vid inflationsperioder kan detta däremot ha motsatt effekt då en större mängd kassainnehav under höga inflationsperioder tappar sitt reala värde. Denna studie riktar sig mot att studera hur företag väljer att agera under höginflationsperioder i jämförelse mot låginflationsperioder rörande deras kassainnehav. Studiens syfte har varit att undersöka hur sambandet mellan skandinaviska börsnoterade bolags kassainnehav ser ut i förhållande till inflationen, men även om det finns någon skillnad i kassainnehavet mellan hög och låginflationsperioder. Tidigare studier som har gjorts inom detta område har hittat ett U-samband, vilket innebär att företag väljer att minska sitt kassainnehav under låginflationsperioder och öka kassainnehavet under höginflationsperioder för att skydda sig mot de risker som högre inflation bär med sig. Denna studie har hittat ett liknande samband, där den enda skillnaden har varit att kassainnehavet följer en konstant ökning med inflationen genom alla inflationsnivåer. När inflationen kommer når högre nivåer, har man däremot kunnat se att företag väljer att öka sina kassainnehav till högre nivåer än tidigare. Anledningen till att resultaten skiljer sig åt, skulle kunna bero på att studierna har gjorts på två olika delar av världen, men även då studierna har gjorts under två olika tidsperioder där denna studie har gjorts under perioder där inflationen har varit ovanligt hög på grund av omvärldsläget. I framtiden hade det därför varit intressant om studier gjordes i andra världsdelar under samma tidsperiod för att tydligare se om dessa leder till skillnader i de resultat som tidigare studier har producerat.

Cash holding of a firm has in previous studies been argued to be significant in terms of the firm's performance during a financial crisis taking place on international markets because of the financial protection that cash holding provides. Similar research taking place on the Swedish market is deficient, and more so regarding current crises. This study aims to investigate to which extent cash holding affects the firms performance based on the Covid-19 pandemic on the Swedish market, and so on to observe whether a higher percentage of cash is advantageous during this financial crisis of the Covid-19 pandemic. Special consideration has also been given to the determining factors behind companies decisions regarding the level of cash holdings based on a selection of 676 small to medium-sized companies in the IT line of business. The study assumes a quantitative research method where the numeric data has been produced and compiled based out of the Retriever Business database. Based on a bivariate analysis, this study finds a low correlation between the cash holdings and company performance, which has subsequently been analyzed on the basis of theories and previous research. Furthermore, a higher cash holding generates a faster recovery rate for companies. Thus, companies' short-term results are not affected by the level of cash holdings, but the effect becomes increasingly apparent in the long term.