Abstract
The problem of money management has remained relevant over the past years. The aim of the study is to assess the impact of debt and cash flow on the amount of cash on companies with and without financial constraints. The main hypothesis of the study is that the impact of debt and cash flow on the level of cash depends on financial constraints which were taken as two proxy variables – dividend payment and bond rating. To substantiate the hypothesis put forward, a regression model of the influence of debt and cash flow on the level of cash is built in the work.
 For the analysis, large Russian companies in the metallurgical and oil and gas industries were sorted in accordance with financial constraints. Based on the results of the constructed regression model, the following conclusions can be drawn. Borrowed funds of companies negatively affect the amount of cash on the balance sheet, regardless of the presence andtype of financial constraints. Cash flow is not statistically significant for companies without financial constraints.
 This study has some limitations. The research results can be useful for corporate CFOs in order to optimize cash balances.
Highlights
All over the world companies focus increasingly on cash management
The main hypothesis of the study is that the impact of debt and cash flow on the level of cash depends on financial constraints which were taken as two proxy variables – dividend payment and bond rating
This paper shows the role of financial constraints related to maintenance of cash balance of large metallurgical and oil and gas companies which have not been taken into consideration before
Summary
All over the world companies focus increasingly on cash management. It is especially relevant for companies with financial constraints (insofar as such companies cannot get cash through debt financing) because their policy for balance maintenance may be changed significantly.This paper studies financial constraints in cash management of Russian metallurgical and oil and gas companies. All over the world companies focus increasingly on cash management. It is especially relevant for companies with financial constraints (insofar as such companies cannot get cash through debt financing) because their policy for balance maintenance may be changed significantly. This paper studies financial constraints in cash management of Russian metallurgical and oil and gas companies. Companies from these industry sectors are leaders in bond issuing in the Russian market. They have a high debt level, probably financial constraints will have a stronger influence on them. The research purpose is to evaluate influence of debt and cash flow on the amount of balance
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