Cash Stock Research Articles

THEORETICAL PRINCIPLES OF ANTI-CRISIS MANAGEMENT OF FOREIGN ECONOMIC ACTIVITIES OF ENTERPRISES

The article reveals the theoretical principles of anti-crisis management of the enterprise's foreign economic activity. The essence of the concept of crisis is revealed. Attention is drawn to the importance of adaptive anti-crisis management aimed at responding to changes and using opportunities to ensure the sustainable development of the enterprise in the conditions of the external environment. The internal and external causes of the crisis are singled out. The classification, tasks, and main principles of anti-crisis management are substantiated. The key elements of managing the foreign economic activity of the enterprise in crisis conditions, as well as the main approaches to minimizing the impact of threats, are considered. Taking into account the importance of developing anti-crisis programs to prevent and overcome crises at the enterprise, the key methods of work to minimize the impact of threats to the enterprise's foreign economic activity were analyzed, such as: minimizing threats through diversification, information search, risk management, interaction with the environment, control of the internal environment. Diversification approaches have been proven to be the most common and effective in protecting foreign economic activity, but require careful, long-term planning and significant financial investment. It is substantiated that obtaining timely information about the state of the market and the industry is an important step toward reducing threats. Attention is drawn to the fact that risk management covers a wider range of actions than crisis management, including identification, analysis, assessment, management, and mitigation of risks that may arise. Emphasis is placed on ensuring the appropriate level of resource reservation, which is aimed at maintaining the necessary stock of cash, raw materials, goods, and other necessary materials. The importance of establishing long-term partnership relations in the implementation of the enterprise's foreign economic activity has been proven. It has been proven that a comprehensive approach to the creation of a system of anti-crisis management of the enterprise's foreign economic activity should include the organization, planning, and implementation of not only specific competencies but also effective management tools that will help the enterprise adapt to changes and increase its competitiveness.

Measurement and use of cash for payments by half the world’s population

The use of cash for payments is not well measured. This paper argues that the value of cash withdrawn from automated teller machines (ATMs), or as a share of all payments, provides a more accurate and timely measure of the cash used for payments compared with the standard measure of the value of currency in circulation (CIC), or as a ratio to gross domestic product (GDP). CIC is a stock of cash used for legal payments, hoarding and illegal activities, but lacks a corresponding measure of the velocity or turnover of that cash used for payments. Cash from ATMs is a flow. It reflects both a stock of cash and its velocity and is primarily used for legal transactions. This paper compares these two measures for 14 advanced and emerging market economies, which together account for one-half of the world’s population and two-thirds of world GDP. The time pattern of both measures over 2005–2020 is illustrated graphically. Often, one measure rises while the other falls, or one is stable while the other is not, or both are rising or falling but at different rates. After reaching a peak in cash use between 2005 and 2018, the per capita share of cash withdrawn from ATMs in almost all of our countries begins to fall, consistent with what some merchants report, while CIC keeps rising. A measure of cash from ATMs may better inform monetary policy (demand for money) and regulatory decisions concerning access to and use of cash in a country.

Chief executive officer ability and cash holding decision

PurposeThis paper aims to consider the effect of the chief executive officer’s (CEO) ability on the amount of cash stock at the firm level.Design/methodology/approachThe empirical hypothesis is examined via fixed-effect regression models using data from US incorporated firms.FindingsConsistent with the upper echelon theory and cash holding motives, the results reveal that able CEOs are associated with an increased level of cash stock, ceteris paribus. Further analysis shows that the association between CEO ability and firm cash holding is more profound for financially sound firms. The authors also demonstrate that firm size significantly affects the relationship between CEO ability and cash management. The results are robust to various sensitivity analyses and additional tests.Research limitations/implicationsThis work is subject to limitations inherent in the use of relevant proxies. Thus, the study implements several model specifications to ensure the validity of findings in a more generic context. Future research should investigate the board structure’s role and the monitoring procedures on the CEOs’ cash holding behavior as a natural extension to this study.Practical implicationsThe insights derived from the study are expected to advance the decision-making process of cash policies and CEO selection for shareholders, business executives and investment strategists.Originality/valueOverall, the study provides new evidence that CEO ability is a contingent factor of corporate cash stock.

Does a country's environmental policy affect the value of small and medium sized enterprises liquidity in the energy sector?

AbstractCash management is important for energy SMEs, which, differently from large firms, face severe financial constraints and need to seize growth opportunities to ensure their survival. This paper, analyzing a large sample of European energy SMEs, finds a positive effect of holding a buffer of cash on firm performance. It shows that a stock of cash allows energy firms to prevent negative contingencies and/or achieve valuable growth patterns and investments. Moreover, considering that the energy industry is involved in environmental sustainability policies promoted by national governments, we find that complying with environmental regulations reduces the value of cash. Countries that pay more attention to environmental issues provide energy SMEs with growth opportunities and financial support, reducing the need to hold a stock of cash. A key implication is that, in a context with high environmental concern, energy SMEs have more financial flexibility to guarantee their growth with positive externalities for the energy sector.

Cash stock strategies during regular and COVID-19 periods for bank branches by deep learning

Determining the optimal amount of cash stock reserved in each bank branch is a strategic decision. A certain level of cash stock must be kept and ready for cash withdrawal needs at a branch. However, holding too much cash not only forfeits opportunities to make profit from the exceeding amount of cash in the stock but also increases insurance cost. This paper presents cash stock strategies for bank branches by using deep learning. Deep learning models were applied to historical data collected by a retail bank to predict the cash withdrawals and deposits. Data preparation and feature selection to identify important attributes from the bank branch data were performed. In the prediction process, two Recurrent Neural Network techniques—Long Short-Term Memory and Gated Recurrent Units methods—were compared. Then prediction errors were measured and statistically tested for their probability distributions. These distributions together with the predicted values were used in determining the lower and upper bounds for holding the cash stock. These bounds were employed to recommend the cash stock level strategies by having two options for different situations. The impacts of COVID-19 were also tested and discussed. According to the bank under this study, the proposed strategies can reduce the amount of cash stock by more than 10% for which was their initial target. Hence, the costs of cash management such as insurance cost and cash transportation cost were reduced. Moreover, the excess cash could be used for other purposes of the bank.

Latour-Marliac, Since 1875

This case follows Charlie Zerzan as he tries to save Latour-Marliac, the cash-strapped but historically important company he owns in the south of France. Rather than devastate the company, the global pandemic of 2020 was a boon, leaving it with a stock of cash just as a handful of unique opportunities for growth arrived. Dumaurier must decide how far to go in pursuing these opportunities. On one hand, the company needs growth to break a decades-long period of stagnation, while on the other it cannot go back to the dangerously precarious cash position it had been in. How much debt is too much? How will revenue trend in the future? In order to seize the moment, Zerzan must project cash flows for the next 4 years, choose a growth strategy, and present his banker with corresponding pro forma income statements.

ВПЛИВ ПАНДЕМІЇ COVID-19 НА СТАН ГОТЕЛЬНО-РЕСТОРАННОГО БІЗНЕСУ В УКРАЇНІ

Quarantine restrictions, which were actively introduced around the world in early 2020, affected absolutely all areas of economic life. Particularly critical was the impact on the hotel and restaurant business. This is confirmed by existing research, which shows that almost a third of business owners have lost 90 to 100% of their income. And this is only at the beginning of quarantine. The same entrepreneurs fired about half of their employees. In addition, a small proportion of full-service restaurants tried to continue operating at a small capacity. This was possible through the use of government procurement or the organization of takeaway activities, to provide the minimum necessary stock of cash to resume operations in the future. The rest were forced to close. Similar trends were observed in the hotel business, but in the case of hotels, the situation was even more critical. Therefore, the need to monitor the impact of the COVID-19 pandemic on the hotel and restaurant business, as a basis for the formation of measures to restore this area of the economy in the future determine the relevance of our study. The scientific article examines the impact of quarantine restrictions on the hotel and restaurant business through the prism of analyzing the degree of decline in income, the percentage of job cuts, the number of employees granted leave at their own expense, and the share of laid off workers. In addition, the distribution of the areas most affected by quarantine is considered in terms of determining the percentage of victims who were not affected by quarantine, as well as those who benefited from quarantine restrictions. The dynamics of changes in the number of operating restaurants is studied. The reasons for the formation of a disappointing situation in the hotel and restaurant industry are analyzed. Have been developed measures for business owners to ensure the successful operation hotels and restaurants in the quarantin conditions, as well as proposed steps to be taken at the state level to support the hotel and restaurant business.

Financing Cash Flow, Discretionary Accruals and Stock Return of Firms Listed in Nairobi Securities Exchange, Kenya

The purpose of the study was to establish the effect of financing cash flow on stock return and to test the moderating effect of discretionary accruals on the relationship between financing cash flow and stock return. Panel data was collected from 29 listed non-financial firms at NSE for 12 years from 2007-2019. Fixed effect hierarchical regression analysis showed that financing cash flow had a positive and significant effect on stock return while discretionary accruals negatively moderate the relationship between financing cash flows and stock returns. The study concludes that financing cash flow improves stock return, however, high discretionary accruals adversely reduce the effect of financing cash flow on stock return. Therefore, the study recommends that NSE should enact incisive regulations pertaining to discretionary accrual practices and its implication on stock return to protect investor vulnerability to losses in their investment due to managers’ opportunistic behaviours.

The Global Financial Crisis and Adjustment Speed of Cash Holdings

Dış finansmana erişimin sınırlı olduğu zamanlarda nakit tutma stratejik bir öneme sahip olmaktadır. Likit varlıklar, özellikle dış şoklarla birlikte firmaların varlıklarını devam ettirebilmeleri için çok önemli hale gelmektedir. Öyle ki, nakit varlıkların talep fonksiyonu, doğal bir deney imkânı sunan 2008-2009 Küresel Finansal Krizine (KFK) bağlı olarak değişebilmektedir. Optimum nakit tutma teorisine dayanan bu çalışma, KFK’den önce ve sonra Borsa İstanbul (BİST)'da işlem gören finansal olmayan firmaların nakit varlıklarının ayarlama hızını 2003-2018 zaman dilimi için incelemektedir. Herhangi bir içsellik problemini azaltmak için genelleştirilmiş momentler yöntemi (GMM) kullanılmıştır. Bulgular, BİST’teki firmaların KFK sırasında kredi arzının azalması ve dış fonlama maliyetlerinin de artmasından dolayı daha fazla nakit stoku kullanmaları neticesinde, kriz ve sonrasında nakit varlıklarının ayarlama hızının arttığını göstermektedir. Genel bir sonuç olarak, firma sahipleri ve yöneticileri, krizler gibi yüksek belirsizlik ortamlarında kurumsal finansmanı etkileyen faktörleri de göz önünde bulundurarak ve nakit tutmanın maliyetini hesaba katarak, firmaları için doğru nakit tutma politikası belirlemelidirler.

The Role of Contracts in Venture Capital Returns

During contract negotiations with startups, venture capitalists (VCs) can receive preferred stock with additional cash flow rights to yield a higher return than the common stock return. The common share price is currently used to calculate payoffs to limited partners (LPs), but incorporating contract terms can considerably change the payoff distribution. Realized proceeds to LPs reveal that VCs exercise all available cash flow rights. Such choices are most financially significant when startups have relatively low acquisition prices, which is also the most frequent outcome. Consequently, the current post-money valuation method is an overvaluation of the true price of all outstanding securities. <b>Key Findings</b> ▪ After constructing a novel dataset of realized proceeds to LPs, the author found that VCs exercise all the preferred stock cash flow rights available to them in their contracts. ▪ VCs invest relatively the same amount of money into startups that become failures, small acquisitions, large acquisitions, or IPOs. Because they are not able to accurately predict a startup’s exit outcome, the cash flow rights accumulate into a significant amount for a fund. ▪ The post-money valuation calculation assumes common stock, and it is an overvaluation of the startup’s true value that considers all outstanding securities.

Programy automatycznej reinwestycji dywidendy jako instrument polityki wypłaty dywidendy w spółce akcyjnej

&lt;p&gt;&lt;strong&gt;Uzasadnienie teoretyczne&lt;/strong&gt;: Zagadnienie programów automatycznej reinwestycji dywidendy jest rzadko poruszane w polskiej literaturze, brak jest całościowych opracowań dotyczących programów automatycznej reinwestycji dywidendy. Zagadnienie to najczęściej pojawia się przy omawianiu narzędzi polityki dywidendy.&lt;/p&gt;&lt;p&gt;&lt;strong&gt;Cel artykułu&lt;/strong&gt;: Przedstawienie założeń programów (planów) automatycznej reinwestycji dywidendy, które mogą stanowić narzędzie polityki wypłaty dywidendy w spółce akcyjnej, a także dokonanie analizy programów automatycznej reinwestycji dywidendy oferowanych przez 30 amerykańskich spółek reprezentujących Dow Jones Industrial Average Index.&lt;/p&gt;&lt;p&gt;&lt;strong&gt;Metody badawcze&lt;/strong&gt;: W opracowaniu wykorzystano jako metody badawcze analizę literatury oraz analizę dokumentów (broszur) opisujących programy automatycznej reinwestycji dywidendy.&lt;/p&gt;&lt;p&gt;&lt;strong&gt;Główne wnioski&lt;/strong&gt;: Programy automatycznej reinwestycji dywidendy zostały wdrożone przez wszystkie spółki wchodzące w skład Dow Jones Industrial Average Index. Znaczna część analizowanych programów zalicza się do grupy tzw. bezpłatnych programów reinwestycji dywidendy (&lt;em&gt;No-Fee Dividend Reinvestment Programs&lt;/em&gt;). Z dokonanych obserwacji wynika, że często programy automatycznej reinwestycji dywidendy uzupełniane są o dodatkowe programy zakupu akcji, określane jako &lt;em&gt;Optional Cash Purchase Plans&lt;/em&gt; (OCPs) lub &lt;em&gt;Stock Purchase Plans&lt;/em&gt; (SPPs).&lt;/p&gt;

Pengaruh Kandungan Informasi komponen Laporan Arus Kas, Laba Akuntansi Dan Size Perusahaan Terhadap Return Saham Pada Perusahaan Consumer Good di Bursa Efek Indonesia

This study aims to examine the impact of the information content component of the cash flow statements, accounting profit, and company sizes on stock returns in consumer goods companies listed on the Indonesia Stock Exchange in the 2014-2017 period. The population in this study are corporations listed on the Indonesia Stock Exchange, specifically consumer goods companies. The sample were obtain by purposive sampling method. There are 30 companies that match the criteria. The data analysis was contucted using SPSS version 22. The technique of data analysis was descriptive statistics, classic assumption tests, hypothesis testing utilising multiple linear regression analysis. The research findings explicated several discoveries such as the following : 1) Operating cah flow has a negative and no significant effect on stock return, 2) Investment cash flow holds a positive and not significant effect on stock return, 3) Funding cash flow have a positive and not significant on effect stock return, 4) Accounting profit has a negative and no significant on effect return stock, 5) The size of the company has a positive and significant effect on stock return. The limitations of this study were that the adjusted R2 examined only had an effect of 13.2%. This shows that the influence of operating cash flows, investment cash flows, funding cash flows, accounting profit and company size on stock return is still very small compared to other factor, which is 86.8% and influenced by other factors which can be examined further. Future research needs to pay attention to other factors such as grofit, ROA and ROE.Keyword : operating cash flow, investment cash flow, funding cash flow, accounting profit, company size, and stock return.

Organizational resources and survival of startups firms – a qualitative analysis in the Peruvian context

PropósitoEn este documento se utiliza una combinación de la teoría basada en los recursos y la teoría de las capacidades dinámicas para explorar el fenómeno de la sobrevivencia de startups en un ecosistema emprendedor incipiente.Diseño/metodología/enfoqueEl estudio tiene un diseño de investigación fenomenológica, con un alcance exploratorio y un enfoque cualitativo. Utiliza entrevistas en profundidad para identificar las percepciones de los agentes del ecosistema sobre el fenómeno de la sobrevivencia.HallazgosEn este documento se argumenta que la sobrevivencia de los startups debe estudiarse como un constructo que se refleja en cuatro condiciones: el punto de equilibrio, el crecimiento acelerado, el stock de efectivo y la operación continua. Además, se forma por la interacción de cinco categorías de recursos organizacionales: el capital humano, el capital social, el capital emprendedor, el capital organizacional y el proceso de incubación.Originalidad/valorEl documento ofrece un modelo holístico de sobrevivencia que podría ser aplicable en ecosistemas emprendedores incipientes como el peruano. Este modelo presenta a la sobrevivencia como un constructo reflexivo-formativo y no como una variable dicotómica (empresa en actividad / empresa cerrada) como se ha considerado comúnmente en la literatura.

Gender diversity, cash holdings and the role of the institutional environment: empirical evidence in Europe

ABSTRACTWhile substantial evidence is emerging internationally on higher risk aversion among women than among men, there is less evidence on women’s business choices. We explore some of the reasons for the relationship between gender diversity and cash holdings. Specifically, this paper focuses on the choices involving the stock of cash held by firms in which women have executive roles and can consequently exert a crucial influence on the firms themselves. We estimate our proposed empirical models using a dataset of 12,466 observations from 18 European countries. We find a positive relationship between the presence of women with executive roles in the firm and cash holdings. Women tend to make more conservative choices probably because they are more risk averse than men are. This propensity has a relevant impact on the financial choices of firms when women play a leading role. Notably, the study demonstrates that the institutional environment and industry differences moderate our baseline relationship.

Individual Stock Cash Inflow–Outflow Imbalance, Individual Stock Investor Sentiment and Excess Returns

ABSTRACTBehavioral finance research presents evidence of the importance of “anomaly factors” in the stock market. In this article, we develop an individual stock cash inflow–outflow imbalance index based on individual stock cash inflow and cash outflow and further examine the combined effects of individual stock cash inflow–outflow imbalance and individual stock investor sentiment on excess returns. Our results show that the combined effect of individual stock cash inflow–outflow imbalance and individual stock investor sentiment on excess returns is stronger positive relation. Furthermore, we find that increasing individual stock cash inflow will increase excess returns; on the contrary, increasing individual stock cash outflow will decrease excess returns. Overall, our results highlight the importance of individual stock cash inflow, cash out flow, and cash inflow–outflow imbalance on asset pricing.

What is the Real Relationship between Cash Holdings and Stock Returns?

What is the Real Relationship between Cash Holdings and Stock Returns?

Організація і методика оцінювання резервів капіталу в бухгалтерському обліку

The process of capital reservation is important measure for maintaining the enterprise economic potential, ensuring the financial and economic conditions for the activities of enterprise in periods of uncertainty, as well as preserving the enterprise capital from reduction. From an economic point of view today the reservation turned into accounting procedures that ultimately do not provide for the formation of real assets and funds to cover future expenses, the allocation of any stock of cash or other assets. For this reason, the organization of accounting for capital reserves needs to be updated. Especially acute is the problem of estimating capital reserves, since an insufficient amount of reserves negates their protective function, and too much amount of reserves restricts the distribution of capital. The purpose of the article is to analyze and disclose the existing approaches to assessing the capital reserves of an enterprise. Organizational and methodical approaches to the assessment of capital reserves were investigated based on the existing types of value and taking into account the accounting principles. The influence of accounting principles on the formation of capital reserves was disclosed. The conditions for recognizing and accounting of reserves to cover the forthcoming expenses were systematized. The methods for estimating the capital reserves were analyzed and ways to improve them were suggested. Organizational and methodical stages of capital reserves formation at the enterprise were developed and the role of assessment at each of these stages was determined. Based on the generalization of the theory and practice of accounting, three approaches to the assessment of the capital reserves were outlined: 1) based on legislative instructions; 2) taking into account the experience of previous years; 3) in accordance with the financial policy of the enterprise.

Modelling on Stock Investment Valuation for Long-term Strategy

This paper developed long-term investment of stock cash flow activities comprising of how yearly investment contribution turns to share units and vice versa, how the series of dividends pay out are declared and finally, how the growth of share units are generated over the years of investing period. These investment model activities form cash inflows and outflows and hence, in return, the performance of this investment model can be evaluated. In addition, this model also constrained that, the yearly dividends obtained were being reinvested together with the annual contributions in accumulating shares. Besides presenting the computation of purchasing and selling of share units and the amount of dividend obtained, this paper contributed in the computation of the growth of the shares in a year, based on share issuance such as share split or consolidation, as well as bonus share rewards. Based on these activities, the net present value (NPV) was derived and the modified internal rate of return (MIRR) was determined by setting up zero-valued of NPV. We illustrated the computation of MIRR by looking at the investment activity towards Prolexus Berhad from the year 2011 to 2015. The increasing of company share prices through years, the encouraging series of dividend rates and generous of the company in issuing shares to the shareholders, were also clearly figured that determined attractive MIRR.

The effect of cash holdings on firm performance in large Italian companies

AbstractThis paper examines the relationship between cash holdings and performance in Italy over 36 years. Specifically, in light of the presence of conflicting evidence concerning the worth of cash stock, which could lead to a positive effect rather than a negative one, the role of moderating factors that can shape the magnitude of this relationship is investigated. The results show that the value of cash holdings is affected by firm‐specific characteristics, as well as factors related to the institutional context. Although other studies have analyzed moderators one at a time, this is the first work to consider how they jointly work. When the moderators are considered together, some of them become no longer statistically significant while others become even more economically and statistically relevant.

Cash holdings and SME performance in Europe: the role of firm-specific and macroeconomic moderators

For the first time, this paper examines the way in which cash holdings affect firm operating performance in a wide sample of European small and medium-sized enterprises (SMEs). Our results suggest that cash holdings have a positive effect on operating performance, supporting the relevance of precautionary savings motive for SMEs. Maintaining a buffer of money on hand, ready for use in any contingency, has a relevant positive effect that overcomes potential opportunistic problems. Moreover, we find that firm-specific characteristics, such as debt, size, age, growth opportunities, and ownership concentration, moderate our baseline relationship. In addition, the study also demonstrates that cash holdings have a stronger positive effect on operating performance in poorer institutional contexts. Notably, we also find that the stock of cash had a relevant role in supporting firm performance during the recent global financial crisis. Finally, we report additional analyses to corroborate our baseline results.