Adequate Cash Research Articles

The Impact of Solvency and Liquidity on Going Concern Audit Opinion

Purpose: This research aims to examine how a company's ability to meet its financial obligations and maintain adequate cash flows influences an auditor's assessment of going concern uncertainty for manufacturers listed on the Indonesia Stock Exchange.Method: A quantitative analysis of secondary data was performed using financial information from 228 randomly selected manufacturing firms traded on the Indonesia Stock Exchange. Logistic regression was used to analyze the effect of solvency metrics and liquidity ratios on going concern audit opinions.Findings: The study uncovered that both decreasing solvency and dwindling liquidity have a statistically significant negative correlation with avoiding a going concern flag. Lower ratios for meeting debt obligations and maintaining cash were associated with a higher likelihood of an auditor expressing doubt about a company's ability to continue as a going concern.Novelty: This research provides new insights into the role of solvency and liquidity in shaping auditors' decisions within the context of manufacturing companies in Indonesia, contributing to the broader literature on financial stability and audit practices in emerging markets.Implications: The study’s findings suggest that companies should prioritize maintaining strong solvency and liquidity positions to avoid receiving going concern audit opinions. For auditors, the research underscores the need to closely monitor these financial metrics when assessing a company’s ability to sustain operations, particularly in emerging economies like Indonesia.

Performance of Companies and Controlling Share Ownership on Company Liquidity: Evidence from Emerging Markets

The relationship between the fundamentals of a firm and cash holdings is an interest topic in financial accounting and financial market literature. Adequate cash holdings can lead to higher profits and financial flexibility, allowing companies to take advantage of opportunities. Therefore, the real estate and property sector requires optimal liquidity holdings to avoid losing investment opportunities and achieve organizational goals. This study examines the effect of controlling share ownership and profitability on cash holdings in the corporate sector. Our samples are the real estate and property sub-sector from 2018 to 2021. The study uses quantitative methods with an archival technique from a capital market database. We performed multiple linear regression to test our hypotheses. The findings show that controlling share ownership has a significant influence on cash holdings. However, the profitability impact on cash holding is not supported. Our study has several limitations, i.e., (1) The study focused only on sub-sector real estate and property, and (2) Our sample period was conducted during 2018-2021. Originality/value examines the effect of controlling share ownership and profitability on cash holdings in the corporate sector, with a focus on the real estate and property sub-sector from 2018 to 2021.

Constraints and Suggestions of Fruit Crop Growers of Vijayapura District, India

The study was conducted in Vijayapura district of Karnataka during 2019-20 to analyse the constraints and suggestions of fruit crop growers. Forty each grape, lime and pomegranate growers were selected by use of simple random sampling technique. Thus, making a total sample size of 120. Personal interview method was used to collect data and appropriate statistical tools were applied to analyse the data. The findings revealed that, with respect to the constraints faced by fruit crop growers in fruit crop production, production constraints were lack of irrigation facilities (87.50%) followed by high cost of inputs (73.33%). Major financial constraints were non-availability of credit at right time (73.33%) followed by inadequate credit (70.83%). High wages (70.00%) and non-availability of labourer (61.67%) were the main issues relating to labour constraints. Regarding marketing constraints, fluctuating price (87.17%) followed by delayed cash payment and exploitation by middlemen (77.50%) were the major constraints. The suggestions offered by the fruit crop growers are provision for irrigation facility (85.00%) followed by provision of timely and adequate market information (76.67%), protection from exploitation by middlemen (75.00%). Provision for suitable market infrastructure, timely and adequate credit, timely and adequate cash payment, continuous power supply, interest free credit and longer repayment period for credit were other suggestions offered to improve the returns from fruit crop cultivation.

DETERMINANTS OF CASH HOLDING OF NON-CYCLICALS SECTOR COMPANIES LISTED ON INDONESIA STOCK EXCHANGE

The Indonesian government’s response to COVID-19 involving social restrictions has led to a slowdown and limitations in economic activities. Cash holding can act as a safeguard and play a crucial part in companies, particularly in covering transaction activities and operational expenses. On the other hand, holding an excessive amount of cash also has disadvantages, as it can lead to missed profit opportunities since idle cash does not generate income. This study aims to analyze the impact of liquidity, net working capital, and growth opportunity on cash holding of consumer non-cyclicals companies listed on the Indonesia Stock Exchange (BEI) in 2020-2022. The data used in this study is secondary data collected from the company’s financial reports from the IDX website (www.idx.co.id). The sample selection in this study was carried out through purposive sampling, resulting in a total of 115 data included in the research sample. The data was proceeded and analyzed using Microsoft Excel 2019 and Eviews 13. This study uses the panel data analysis method with a random-effect model as the estimation model and multiple linear regression analysis. The research was continued by testing classical assumptions, F-test, T-test, and coefficient of determination test. The results show that liquidity and net working capital have a positive and significant effect on cash holding, while growth opportunity does not affect cash holding. Management of non-cyclical consumer companies must pay more attention to liquidity and net working capital to maintain cash holdings. The implications of this research show the importance of maintaining liquidity and working capital rather than paying attention to company growth opportunities, because growth will be easily achieved if you have adequate cash holdings.

Intellectual capital efficiency, institutional ownership and cash holdings: a cross-country study

PurposeThis study aims to investigate the roles of intellectual capital efficiency and institutional ownership on cash holdings and their speed of adjustment.Design/methodology/approachUsing a sample of 432 firm-year observations of tourism-listed companies, three measures of cash holdings are used as dependent variables and intellectual capital efficiency and institutional ownership as independent variables. The financial data is collected from the S&P Capital IQ database for the period 2015–2020. Two system-generalized methods of moment estimation are used for the robustness checks of the results.FindingsThe study provides evidence that an increase in intellectual capital efficiency in tourism firms results in lower cash holdings. The research findings also report that characteristics such as firm size, age and market-to-book value ratio are associated with cash holdings. Furthermore, institutional ownership in these firms did not affect the cash holdings. The results also confirm the existence of a target cash holding level to which the tourism firms attempt to converge. These results are robust to the alternative proxy of cash holding and endogeneity tests.Research limitations/implicationsThe study uses intellectual capital efficiency measured by the model proposed by Pulic. Alternative measures of intellectual capital can be included in future studies. Future research can also investigate the impact on cash holdings before and during the pandemic for tourism companies. The study is limited to the impact of institutional ownership; thus, research can be extended to consider other types of ownership.Practical implicationsThe findings of this study indicate that tourism companies should take into account the impact of intellectual capital efficiency on their cash holding decisions. The industry uses a specific financial management strategy in light of better efficiency and possibly values the opportunity cost of holding more cash. Additionally, regulators should re-examine the role of institutional ownership in tourism firms, as it was found to have no impact on cash holdings. The regulators may need to consider other factors, such as firm size and age, when developing policies and regulations to ensure that tourism firms have adequate cash holdings.Originality/valueThis study adds to the body of knowledge on the factors that influence cash management and ideal cash levels for the tourism industry. The examination of the effect of intellectual capital on cash holdings is a novel contribution, filling a gap in the existing literature. The findings on the speed of adjustment towards optimal cash holdings also provide support for the trade-off theory.

Downside of Agency Banking in Nigeria

The study was conducted to investigate the downside of agency banking in Nigeria using Enugu South LGA of Enugu State as a case study. This study adopted the survey research resign. The survey was designed to elicit responses from respondents on the downside of agency banking in Enugu South LGA of Enugu State, Nigeria. The source of data was primary, obtained through the administration of questionnaire to agent bankers (POS operators) within the area of study. The population of the study consists of all POS operators in Nigeria. The sample size was calculated using the general formula for determining the sample size of an unknown population. The study used both descriptive and inferential statistics and the hypotheses were tested at 5% level of significance. It was found that robbery and liquidity shortage militate against the operation of agency banking. The study therefore recommends that the agent banker should ensure the availability of adequate cash that can reasonably serve customers without running into shortages or surplus of money while the government and commercial banks should partner in ensuring adequate security necessary for the operation of agency banking in Nigeria

Capital structure and financial performance of listed non-financial firms in Ghana

Capital structure and its impact on firm performance is a key issue in finance, and there are a number of theories and empirical papers that explain this relationship. Using secondary data from listed companies that have traded on the Ghana Stock Exchange (GSE) from 2016 to 2020, the study specifically examines the effect of short-term debt, long-term debt, and total debts on the operational efficiency of listed non-financial companies in Ghana. The study shows that a firm's return on assets decreases as its amount of debt accumulation rises. Also, some firm-specific variables have small but significant impacts on enterprises' profitability. The study recommends that, to ensure that there is adequate cash available for the company's ongoing operations, corporate finance managers should ensure working capital is managed properly and responsibly. Also, in the extreme case where a short-term borrower facility is unavoidably required and must be acquired, the study advises administrators to make sure that the total amount of short-term obligations taken on as a percentage of the capital structure is less than the sum of non-current liabilities and equity in total assets.

Current and Future Trends of Construction Project Performance Models: A Review

The construction industry (CI) has experienced outstanding growth and contributed to economic growth for many countries, with enormous foreign investments that require quality projects. High pressure to reduce the construction cost and time commonly put the industry at risk of lower quality and safety of the construction facilities. Like many other developing countries, Tanzania needs more stringent quality control measures in the construction sector to contribute positively to sustainable growth. This study thus reviews current and future trends in construction industry performance in Tanzania. The literature review on construction projects (CPs) performance is based on information on time overruns from contractors, clients, and consultants of the Tanzanian CIs. Initially, 300 literatures were reviewed and manually screened to about 50 literatures. Results showed that 56% of the 50 reviewed literatures indicate the need to reduce the time overruns in CPs. Further, it was noted that more responsibility in addressing time and cost overrun challenges in the CPs lies on clients, consultants, and contractors. Moreover, planning scheduling factors (PSF) is noted to be the most noteworthy category of factors that greatly influence project performance. In contrast, records and documentation factors (RDF) scored as the second most significant factor in performance in terms of cost overruns. The study, therefore, concludes that contractors, clients, and consultants should have an adequate cash flow plan, properly manage financial resources, advance site management through experts, and institute appropriate planning and scheduling. Thus, these research findings propose factors that lead to time overrun, thus portraying the establishment of robust systems to eliminate time overrun causes.

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

Manufacturing companies need effective cash management to meet their capital expenditures and cash holding. Effective cash management needs to be supported by good governance so that it can determine adequate cash holding. Independent variables in this study were measured by cash flow, cash conversion cycle, capital expenditure, net working capital, and board of commissioners' activities. Governance measured by the board of commissioners' activities is also a moderation variable. The data in this study were processed and analyzed using Eviews 10 for the period 2017 to 2020. The panel's data regression results show that the cash conversion cycle and net working capital have a negative influence on cash holding. Cash flow, capital expenditure, and board of commissioners' activities have no effect. The moderation regression test results show that the board of commissioners' activities could not moderate the influence of cash flow, cash conversion cycle, capital expenditure, and net working capital on cash holding.

Study of Cashflow Constrains in a Construction Project

A constraint is a condition, agency or force that impedes progress towards an objective or goal an and Construction industry is a one of the most risky sectors due to high level of uncertainties included in the nature of the construction projects. Although there are many reasons, the deficiency of cash is one of the main factors threatening the success of the construction projects and causing business failures. Therefore, an appropriate cash planning technique is necessary for adequate cost control and efficient cash management while considering the risks and uncertainties of the construction projects. The main objective of this thesis is to conduct a brief study of cash flow management. ,its various aspects ,The factors influencing a cash.To prepare a questionnaire to identify the factors impact on current markets cashflow status by using satical pacakage for social science(SPSS)software and to develop a framework. The linguistic expressions are used for utilizing from human judgment and approximate reasoning ability of users for reflecting their experience into the model to create cash flow scenarios. The uncertain cost and duration estimates gathered from experts are inserted in the model. The model provides the user different net cash flow scenarios with formats that are beneficial for foreseeing possible cost and schedule threats to the.

Protection of shareholders in cross-border mergers: the new harmonized rules

This article aims at analyzing the new harmonized rules for the protection of shareholders in cross-border mergers. The new Art. 126 a of Directive 2019/2121 introduced for the first time harmonized provisions on the protection of shareholders in cross-border mergers. After a brief discussion of the previous regime, the rights of the new harmonized legal framework of shareholders’ protection under Art. 126 a of Directive 2019/2121 are scrutinized: the right of dissenting minority shareholders to dispose of their shares for adequate cash compensation (exit right), the right to claim additional cash compensation in case of an inadequate initial cash compensation and the right to challenge the share exchange ratio and to claim a cash payment. The minimum harmonization nature of the protection of shareholders in cross-border mergers is also scrutinized. Additionally, this article discusses the status of national law mechanisms for the protection of shareholders after the adoption of new Art. 126 a of Directive 2019/2121. Another interesting issue is the right balance between the effective protection of shareholders and the facilitation of the process of cross-border mergers. There are also some interesting questions for consideration. A few concluding remarks are deduced.

Analisis Faktor-Faktor Yang Mempengaruhi Kebijakan Hutang Perusahaan Dengan Moderasi Profitabilitas

This research aims to examine the effect of institutional ownership, free cash flow and sales growth moderated by profitability on debt policies in the manufacturing and property sectors listed on the Indonesia Stock Exchange during the period 2017 - 2019. This research was conducted by taking 33 sample companies, using purposive sampling method and processed using SPSS version 25. Partial test results (t test) show that institutional ownership and free cash flow have no significant effect on debt policy, while sales growth and profitability which moderates institutional ownership and sales growth shows a significant effect on debt policy. The implication of this research is to increase supervision through institutional ownership towards debt policies that are created and regulated by management and the use of adequate free cash flow to avoid the use of external funding.

Construction automation

Construction industry is creating a lot of enthusiasm for the construction network throughout the most recent couple of decades. This incorporates with skilled work power, adequate cash, and time when it is finished by ordinarily. As these necessities are not constantly accessible in all circumstances, the industry is confronting issues like consistently declining profitability, low work productivity in construction, a high mishap rate, low quality, deficient control of the building site, and the evaporating of the talented work power. To conquer the previously mentioned issues the terms ROBOTICS and AUTOMATION presented. The robots utilized in the construction have followed a similar idea as those utilized in assembling. Building robots have been utilized in different errands including material taking care of, different inside and outside completing assignments and quality control. Be that as it may, this use of mechanical autonomy in the construction business is not completely embraced. The purposes behind this circumstance are distinguished as existing robots are not all around embraced to building construction, issues related with the routinely planned structure, hard to legitimize robot business financially and administrative hindrances. The construction business requests a profitability increment that cannot be achieved by methods for customary techniques that have just arrived at their framework confines and cannot add to advance viability. Further justification must be accomplished by the decrease of work and construction times. Maybe if no critical research advances, temporary workers will have the option to tackle their issues by bringing in mechanical technology and procedure-controlled machines from abroad. Consequently, there is a need to sustain the advancement of effective innovative work programs in construction mechanization and apply autonomy. This paper makes an endeavour to utilize robots in the construction business, recorded to diminish risks at work destinations, improve quality, and decrease the expense of construction. A contextual investigation has been considered to show the appropriateness of robots in the construction business.

Single Supervisory Mechanism and corporate finance: A DSCR based approach for AQR prudential provisioning

Asset quality review (AQR) conducted by the European Central Bank (ECB) introduced 2014 indicators and logic typically used in the context of corporate finance. The new approach tries to overcome the backward-looking approach in favour of a completely forward-looking perspective based on the assessment of cash flows. From the AQR point of view, EBITDA and DSCR have taken particular importance also in the prudential provisioning process. As is known, the AQR manual, for calculating the prudential provisioning, provides that banks, in a going-concern perspective, estimate the recoverable amount of loans by appropriately discounting the cash flows. Our work, although under some hypotheses, highlights limitations in the prudential regulatory approach. The paper, using a DSCR-based dual-leg approach, tries to propose a generalisation logically consistent with the guidelines on loan origination and monitoring recently expressed by the European Banking Authority (EBA) (EBA, 2020). Although there is literature dealing with access to credit constraints (Demirgüç-Kunt & Maksimovic, 1999; Beck & Demirgüç-Kunt, 2008; Calabrese, Girardone, & Slip, 2020), with the relationship between credit risk management framework and accounting standard (Porretta, Letizia, & Santoboni, 2020) and with loan loss coverage policies (Alessi, Bruno, Carletti, Neugebauer, & Wolfskiel, 2020), no empirical or theoretical research analyses the relationship between prudential provisioning and underlying incentive structure. This paper offers a contribution in this regard highlighting how an economic approach for provisioning tends to reward companies capable of generating adequate prospective cash flows given the contractual structure of the loan, thus mitigating the potential allocative distortions implicit in the incentive structure underlying the AQR approach.

Evaluasi Sistem Pengendalian Intern Penerimaan Kas Pada Pdam Tirta Anoa Kota Kendari

This research aims to evaluate the suitability of internal control of cash receipts at the PDAM Tirta Anoa in the city of kendari. Data collection methods in this research are interviews and documentation. This research uses descriptive analysis that explains the evaluation of the internal control system.The results of the research show that strenght of the internal control system of cash receipts at the PDAM Tirta Anoa in the city of kendari is the existence of password authorization in the operation of SIPDAM and training for employees. However, it also has a weakness in the internal control system of cash receipts to the city where the city of kendari, such as document storage has not been handled properly, and when electricity is off all transactions are stopped as well. In general, the internal control system of cash receipts at the PDAM Tirta Anoa in the city of kendari is good enough, although it has several weakness.The conclusion of this research is.internal control system also has adequate cash enough receipts and operating effectively viewed from the insur-suppotring elements in the internal control of cash receipts

Prediction of Regional Revenue and Expenditure Budget using Autoregressive Integrated Moving Average (ARIMA)

The Regional Revenue and Expenditure Budget (APBD in Indonesia) is a financial plan stipulated by Regional Regulations. The APBD of the North Sumatra Provincial Government is the reflection of development direction in the Province of North Sumatra since it would not be possible to execute the regional development process without being supported by adequate cash. Therefore, this study aims to predict the APBD allocation in 5 types of accounts, namely Regional Original Revenues, Balancing Funds, Other Legal Regional Revenues, Indirect Expenditures, and Direct Expenditures using time series data from 2002 to 2019. The proposed method in this study is Autoregressive Integrated Moving Average, which is a forecasting method using the time series data in the form of current and past data of the APBD. The results showed that the forecasting of the 2020 APBD value for the Regional Original Revenue account is IDR 6,989,217 Million, for the Balance Fund account is worth IDR 8045.259 Million, for Other Legitimate Income is at IDR 317,546 Million, for Indirect Shopping is worth IDR 9,308,607 Million and for Direct Shopping at IDR 5,495,597 Million.

Financial Determinants of Liquidity Positions of Listed Manufacturing Firms on the Nigerian Stock Exchange

The study evaluated the influence of financial determinants on cash holdings of selected quoted manufacturing firms in Nigeria. Specifically, the effect of these determinants (return on assets, financial leverage, dividend payment, cash flow volatility and market to book ratios) on cash holdings was examined. Influence of other determinants used in extant literature designated control variables in this instance was also investigated. Ex-post-facto research approach via quantitative panel methodology was employed to ascertain the effect of the predictors on corporate cash holdings. Data were collated from the audited annual reports of forty-one (41) firms for the thirteen year period: 2006-2018. Diagnostic tests confirmed the consistency and suitability of the Fixed Effects (FE) panel regression models. In other words, data were analyzed by means of Prais-Winsten Regression Correlated Panels Corrected Standard Errors (PCSEs) . Findings indicate the existence of a significant positive influence of cash flow volatility, net working capital, market to book ratio on corporate cash holdings, but a significant negative effect of dividend payment and return on assets on cash and cash equivalents. These results imply that stockpiling cash and liquid assets substitutes decreases the value of the firm through market capitalization as they move in opposite direction. Further, highly levered firms may be operating sub-optimally given that the lingering local recession has made borrowing too expensive if not impossible. The study surmised that cash holdings of Nigerian manufacturing firms is significantly influenced by cash flow dynamics and availability of both liquid asset substitutes, market value of the firm and profitability. The study recommends that these firms maintain adequate cash budget and cash flow planning to ensure smooth running of operations, sufficient liquid and near liquid resources to cover maturing loans / debentures, and opt for an optimal liquidity – profitability trade-off at least in the short run given that it boosts the magnitude of both liquidity and profitability. Keywords: Financial Determinants, Cash Holding, Firm Size. DOI: 10.7176/EJBM/12-14-06 Publication date: May 31 st 2020

Gestión del capital de trabajo como estrategia financiera para el desarrollo empresarial


 
 
 El presente artículo tiene por objetivo analizar la gestión del capital de trabajo como estrategia financiera para el desarrollo empresarial, desde una revisión bibliográfica, apoyándose en la teoría de capital de trabajo. La finalidad del capital de trabajo es garantizar que las empresas tengan un flujo de caja adecuado para ejecutar operaciones regulares y así reducir la posibilidad de no poder cumplir con los pasivos u obligaciones a corto plazo. En ese sentido, el capital de trabajo ayuda a mantener la liquidez, la solvencia, la supervivencia y la rentabilidad de la mayoría de las empresas. Por tanto, deben estimar que, mediante la cobranza de las cuentas pendientes en el menor tiempo posible, que equivale al tiempo promedio que se requiere para convertir en efectivo las cuentas por cobrar; la rotación de inventario al mayor número de veces, es decir, el tiempo promedio que se requiere para convertir la materia prima en producto terminado listo para su distribución y posterior venta y pagando las cuentas pendientes (compra de materia prima, mano de obra, etc.) lo más tarde posible siempre y cuando eso no suponga pagar comisiones. Todo ello se constituye como estrategia financiera para el desarrollo empresarial que permite tener un capital de trabajo positivo; pues todo negocio debe lograr que sus ingresos superen a sus egresos. En ese sentido, esta estrategia financiera conlleva una gestión efectiva de cada elemento del activo y pasivo corriente, mediante la planeación, ejecución y control. En consecuencia, la empresa maximice su rentabilidad, teniendo en cuenta los riesgos.
 
 

Effect of Liquidity and Dividend Pay-out on Financial Performance of Deposit Taking SACCOs in Kenya

Capital structure is one of the fundamental aspects to the success of Deposit Taking Savings (DPS) and Credit Cooperative Societies (CCS) as it influences the realization of its objectives and goals. The study intended to determine the effect of two capital structure determinants; liquidity and dividend payout, on financial performance as measured by Return on Assets of DPS and CCS, in Kenya. The study was grounded on the Pecking order and Free cash flow capital structure theories. The study utilized a mixed research design using primary and secondary data for the period 2013 to 2017. The population of the study was 174 DPS and CCS. Stratified and purposive sampling technique was employed. Descriptive statistics and a regression model were used to analyze the data. Results revealed that liquidity and dividend pay-out had a significant and positive effect on the financial performance of DPS and CCS in Kenya. The study concluded that liquidity and dividend pay-out play a significant role in the financial performance of DPS and CCS. The study recommends having in place an Assets and Liabilities Committee in each DPS and CCS that would help manage the assets and liabilities of the institution, ensuring adequate liquidity and cash flow management. Having in place a robust dividend policy that addresses; the basis of the rate of payments and activities that would require funding of which internally generated funds by way of dividend retention, is also critical.

Novel Financial Capital Flow Forecast Framework Using Time Series Theory and Deep Learning: A Case Study Analysis of Yu’e Bao Transaction Data

Appropriate monetary liquidity is important for financial institutions. When institutions lack adequate cash flow for customer redemption, their income will decrease, their reputation will be affected, and they may even go bankrupt. However, the opposite extreme in which more cash is reserved than needed may result in lost opportunities to make successful investments. This study uses Yu'e Bao transaction data to investigate a method for forecasting financial capital flow. Yu'e Bao, which is a financial product launched by Alibaba, faces the core challenge of maximizing commercial profits to reduce investment risks. Liquidity risk is considered the main factor in Yu'e Bao's investment strategy. First, a linear model called YEB_ARIMA is proposed by determining the autocorrelation (ACF) and partial autocorrelation (PACF) parameters, which are optimized by the grid search method. Second, a deep learning model called YEB_LSTM is introduced to strengthen the expressiveness of the model that yields nonlinear transaction features. Then, a hybrid learning method called YEB_Hybrid is applied to improve the original weak classifiers. This model includes both a linear combination and logistic regression learning. Third, a set of experiments and analyses are conducted based on subscription and redemption datasets to demonstrate that the hybrid model achieves an accuracy of 84.39% and 84.36%, respectively, under a variety of evaluation indexes. Finally, various proposed fund reserve ratios are provided based on capital forecasts.