Higher Cash Research Articles

The Effects of Cash Holding Level on Firm Value: Focusing on Distribution Firms Listed on the KOSDAQ Market

Purpose - The Coronavirus disease 2019 crisis has been triggering great economic difficulties to Korean firms. Specifically, distributors have been facing bankruptcy or financial difficulties because of liquidity constraints caused by the government s social distancing policy for quarantine and a sharp drop in overseas travel. The present study aimed to verify whether cash holding level affects firm value when the firm has been suffering from severe financial difficulties. Design/Methodology/Approach - In this study, a total of 1,046 data were selected and analyzed only for distribution-related firms listed on the KOSDAQ market from 2011 to 2020, when international accounting standards have been required for firms. Findings - First, the firm value of a group with a high cash holding level was significantly higher than that of another group with a low cash holding level, thereby indicating that an increase in the level of cash holdings can positively influence firm value in a situation where uncertainty is high. Second, the cash holding level had a positive effect on firm value, thereby indicating that cash holding level can positively influence firm value. Third, export ratio has a positive effect on firm value. Therefore, the export of distributors positively influences firm value. Research Implications - Korean distributors efforts to increase cash holdings may enhance their firm value. In addition, Korean distributors use it as an important tool to secure financial health by maintaining sufficient liquidity.

FACTORS AFFECTING WORKING CAPITAL NEEDS IN MANUFACTURING COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE 2015-2020

The problem in this research is how the company manages their working capital properly with understanding the determinants of working capital for the company to avoid the risk of bankruptcy. This study aimed to examine the effect of leverage, operating cash flow, profitability, sales growth, company size, sales fluctuations, the age of the company, and cash conversion cycle to the working capital requirements individually. The population in this study are all manufacturing companies listed in Indonesia Stock Exchange asmany as 132 companies. The sampling method using purposive sumpling and obtained 80 companies as samples in 2015-2020. The data used in this research is secondary data in the form of financial statements that are downloaded from www.idx.co.id. Data analysis technique used is multiple linear regression. The results showed that leverage, profitability, company size, and the cash conversion cycle significantly influence working capital requirements. These results indicate that the debts of the company, profitability, company size, and the cash conversion cycle, are all factors that must be considered by the company in determining the policies of proper management of working capital with under 5% significant. In connection with the pecking order theory, companies should not use too high debt if they have an advantage in the form of income, asset, and a high cash flow, which can be used to invested in working capital.

Audit Committee’s Cash Compensation and Earnings Management: The Moderating Effects of Institutional Factors

ABSTRACT This paper investigates the relationship between the audit committee’s cash compensation and accrual earnings management. Using a sample of Chinese listed firms over the period 2007 to 2017, findings show a positive association between cash compensation of the audit committee and accrual earnings management. It suggests that high cash compensation to audit committee directors compromises their monitoring role related to financial reporting quality, and high cash compensation to audit committee’s directors leads to an alignment in the audit committee’s interests with those of managers. We also examine the implications of ownership structure and institutional environment on this relationship. Results show that state-ownership significantly moderates the association between the audit committee’s cash compensation and accrual earnings management. We also investigate whether this relationship is influenced by the regional development level or not. Results reveal no difference in this positive association for firms located in more versus less developed regions. Our findings can be of broad interest to regulators in improving corporate governance.

Economic assessment of freshwater carp polyculture in Bangladesh: Profit sensitivity, economies of scale and liquidity

Carp polyculture emerged as a promising practice for the development of aquaculture in Bangladesh in recent years. However, the economic potentiality of carp polyculture relied on the profitability and inputs use pattern. Therefore, this study investigated the economic viability of carp polyculture farming, particularly focused on profitability, profit sensitivity, economies of scale, and liquidity. A survey was conducted using a structured questionnaire to gather cross-sectional data, which included 183 randomly selected carp polyculture farmers from five districts in Bangladesh. Descriptive and econometric analysis was adopted to evaluate the economic performance of the carp polyculture system. The results showed that feed was the most important production input since it accounted for a major share of operating costs (57.3%). Freshwater carp polyculture farming was generally found profitable, although the profit was considerably sensitive with the alteration of feed price and fish price. Economies of scale were evident in this study, where the farm operated in economies of scale had lower productivity but greater cost efficiency. However, some inputs were inefficiently used by the diseconomies scale of farms, which led them to loss of return even though they had higher productivity. High cash flow coverage ratio due to higher yield strategies and low debt-servicing ratios were found, indicating lower liquidity risk for carp polyculture farming. Based on the present findings, it is suggested that farmers should pay more attention to the efficient use of inputs to facilitate a greater cost efficiency, continual cash flow, and sustainable increase in fish production.

Efficacy of Deep Learning Algorithm in Classifying Chilli Plant Growth Stages

Automatic plant growth monitoring has received considerable attention in recent years. The demand in this field has created various opportunities, especially for automatic classification using deep learning methods. In this paper, the efficiency of deep learning algorithms in classifying the growth stage of chili plants is studied. Chili is one of the high cash value crops, and automatic identification of chili plant growth stages is essential for crop productivity. Nevertheless, the study on automatic chili plant growth stage classification using deep learning approaches is not widely explored, and this is due to the unavailability of public datasets on the chili plant growth stages. Various deep learning methods, namely Inception V3, ResNet50, and VGG16, were used in the study, and the results have shown that these methods performed well in terms of accuracy and stability when tested on a dataset that consists of 2,320 images of Capsicum annum 'Bird's Eye' plants of various growth stages and imaging conditions. Nevertheless, the results have also shown that the deep learning methods have difficulty classifying images with a complex background where more than one chili plant was captured in an image.

Addressing Farmer’s Perceptions-attitudes and Constraints to Adopt Agroforestry adjacent to the Coastal Belt of Sundarbans, Bangladesh

Agroforestry is receiving a win-win strategy for low-income countries through increasing attention in Bangladesh especially in the coastal region because of its capacity to address some of the negative consequences of intensive agriculture with sustainable perceptions, attitudes, and management through farmers both locally and globally. As the actual uptake and maintenance of agroforestry in proximity to the coastal area by farmers remains low and that is why this research work investigates agroforestry practices e.g., Homestead agroforestry, boundary plantation, mixed plantation, cropland agroforestry, agrisilvicultural systems, Agro-aqua silviculture, and Agro-aquaculture systems on a sustainable basis with a view to find out the farmers ‘perceptions and attitudes through identifying their constraints and problems with potential opportunities to adopt agroforestry in Satkhira district of Bangladesh. A sample of 80 respondents selected randomly was interviewed through a semi-structured interview schedule individually and a multistage random sampling technique was adopted to conduct the study. Therefore, results revealed that middle-aged farmers (36-50) (46%) are interested in agroforestry practice than a traditional practice. The adoption of younger (26-35) 35% farmers is increasing day by day since they have had more schooling than the older generation or perhaps have been exposed to new ideas as a migrant. Illiteracy (56%) has primary level of education) is the main reason for non-adoption of agroforestry. The farmers (28%) they taken lease from other people who have no own land they are not interested in agroforestry. Farmers (47%) are interested in agro-aquaculture practice, because high cash return get from this practice. About 68.7% respondents have taken positively agroforestry practice, but they have no training skill or facility. If they get this facility, they are more interested in agroforestry practice. Finally result mentioned that 76.25% respondents perceived agroforestry positively and most of the farmer’s (68.7%) have positive attitude towards it whilst maximum farmers (80%) think agroforestry system should be expanded. This research indicates that agroforestry is a catalyst factor which can be adopted more through directed programs, policies and practices by government and its related agencies from this positive perceptions and attitudes of this research. Thus, agroforestry is a sustainable potential land use in the long term through combination of intrinsic and extrinsic factors interact and drive adoption can help integrating technologies appropriately to ensure sustainability adjacent to the coastal region of Sundarbans of Bangladesh.

Corporate Governance's Policy on the Impact of Cash Holding in Indonesia

The Asian Financial Crisis in 1997 and various other scandals in large companies in Indonesia led to the emergence of good corporate governance (GCG). Regulators on the capital markets understand that good corporate governance promotes transparency and improves the quality of financial reporting, including cash management, responsibly. Furthermore, high cash levels lead managers to misuse the fund for personal gain, because the assets under their supervision increase thereby. This research analyzes the effect of corporate governance, such as board size, and independence on cash holding in Indonesia. Data were obtained from 373 firms in seven industries publicly tabulated on Indonesia Stock Exchanges (IDX) from 2008-2017 and 2,742 firm-year observations. The obtained data were analyzed using Common, Fixed, and Random Effects Models. The result showed that the total number of the board of directors, is positively and significantly proportional to Board Size thereby increasing the company holds cash. Meanwhile, the other corporate governance variable, known as Board Independence, is insignificant in any three models. The result also showed positive coefficients of board size on cash holding (CASH) in companies with and without CEO duality. The result further showed that the independent board had a significant and negative impact on cash holding (CASH), which is more pronounced in companies with CEO duality and used to strengthen corporate governance. The results have specific policy implications like the importance of corporate governance, in particular the role of the Board of Directors in the effective supervision of managers and transparency of enterprises.

Corporate R&D intensity and high cash holdings: post-crisis analysis

Corporate R&D intensity and high cash holdings: post-crisis analysis

Liquidity Management Practices of Small and Medium-Scale Enterprises in Lagos State, Nigeria

The study investigated the extent of liquidity management practices among Small and Medium-Scale Enterprises in Lagos State, Nigeria. The study made use of primary data and the population of the study comprised of 4,460 registered Small and Medium-Scale Enterprises in Lagos State based on the Nigerian government contacts database (2015). Using Taro Yamane’s formula, a sample size of 367 Small and Medium-Scale Enterprises was computed for questionnaire administration. In each Small and Medium Enterprises that was randomly sampled, questionnaires were administered to the respondents; Owner, Supervisor or Financial Manager who provided the necessary information on liquidity management practices of their firms. Data collected from the study were analysed with the use of appropriate descriptive statistics. The result of the study revealed that SMEs engaged in liquidity management practices such as cash budget (97%), bank account operation (77%), investment in current assets (67%), and making current assets available for immediate conversion into cash (71%). Use of mechanisms in the realisation of sundry debtors (64%) and collection of debts due (64%). The study, therefore, recommended that regulatory authorities should put in place an appropriate policy with compliance measures to check high volume cash transactions and cash hoarding prevalent in the economy.

Kepemilikan Manajerial, Kepemilikan Institusional dan Kebijakan Dividen serta Free Cash Flow sebagai Pemoderasi

This study aims to determine the effect of managerial ownership and institutional ownership on dividend policy with free cash flow as a moderating variable. This research was conducted at manufacturing companies listed on the Indonesia Stock Exchange (BEI) in 2015-2019. The sample was selected by means of a purposive sampling method with 42 companies as samples and 210 observations. The analysis technique used in this research is Moderated Regression Analysis (MRA). The results of this study indicate that the higher the managerial ownership, the higher the dividend policy, especially in companies that have high free cash flow, and the higher the institutional ownership, the higher the dividend policy, especially in companies with high free cash flow.
 Keywords: Managerial Ownership; Institutional Ownership; Free Cash Flow; Dividend Policy.

Negative Incentives for Noninstitutional Births Are Associated With a Higher Rate of Facility-Based Births in the Eastern Visaya Region, Philippines.

In the Philippines, the "no home-birthing policy" implemented in 2008 has encouraged local governments to endorse ordinances that prohibit noninstitutional deliveries (NIDs). The Philippines' social insurance scheme has also enabled them to provide incentive payments to women who deliver at birthing facilities (BFs). This study evaluated whether these positive and/or negative incentives were associated with an increased facility-based delivery (FBD) rate and examined challenges in implementing those incentive measures in the Eastern Visaya Region of the Philippines. Cross-sectional data were collected regarding delivery locations during 2017, and barangay-level data were collected regarding positive and negative incentives and the characteristics of 4,371 barangays in the region. Multivariate logistic regression analysis, using "ordinance with nonmonetary sanction" as the reference category, indicated that no ordinance to prohibit NIDs was significantly associated with a lower FBD rate (odds ratio [OR]: 0.90, P=.013), and ordinance with low cash penalty (OR: 1.37, P<.001) and high cash penalty (OR: 2.52, P<.001) had higher FBD rates. Positive incentives were not associated with FBD rates (OR: 1.02, P=.563). The FBD rate was also significantly associated with urban barangay status (OR: 1.45, P<.001), availability of a vehicle (OR: 3.19, P<.001), availability of public transportation to a government BF (OR: 1.25, P<.001), and distance to the most accessible government BF (OR: 0.89, P<.001). Substantial proportions of barangays had no vehicles available for transportation (34.1%) or no available vehicles and no public transportation to a government BF (5.5%). Although negative incentives for NIDs could motivate pregnant women to seek FBD, local governments in the Philippines should be aware of barriers that limit access to government BFs in underserved barangays before introducing those negative incentives. Above all, barangay-level investments in making a vehicle for transporting pregnant women might help address these barriers and increase the FBD rate.

Why do corporate cash holdings differ within reunified Germany?

This study examines German firms’ managerial decision-making from the perspective of corporate cash holdings. An econometric analysis of 89,018 firm-year observations for 2004–2016 shows that East German firms hold significantly more cash than their West German counterparts. It is further demonstrated that no reasonable hypotheses (i.e. structural differences, access to financing, and historical differences) can explain East German firms’ higher cash holdings. Instead, the difference in cash holdings is only relevant for small- and medium-sized enterprises (SMEs). Additionally, East German SMEs adjust excess cash more slowly than West German SMEs. These findings are consistent with the hypothesis that cultural attributes influence managerial decision-making and imply that the norms and values of the former German Democratic Republic persist.

Cost-effective Clean Electrochemical Preparation of Ferric Chloride and its Applications

In this investigation, a green, cost-effective clean electrochemical process for preparing a highly concentrated ferric chloride (FeCl3) solution has been proposed. Many operating conditions, affected the used anodic dissolution process for FeCl3 production, were studied. Generating ferrous hydroxide electrochemically then dissolving it by hydrochloric acid and oxidized with chlorine free mixed oxidant, were proceeded steps to reach the production of our target ferric chloride. It is a green, clean, and novel process because it is environmentally and industrial safer than the traditional production technology. The most important studied experimental variables were applied like applied current density, sodium chloride concentration, electrolyte pH, at the most controlling operating parameter which is optimum electrolysis time. Experimental results revealed that optimum current density was 300 mA/cm2; using 30gm/L saline solution, electrodes gap distance 5 cm, and stirring rate 150 rpm at pH 6.5 for 270 minutes, respectively. At these optimal operating parameters, 40% FeCl3 concentration can be prepared to consume 202 watts/liter of high quality with low capital, & operating costs. The economic indicators show that the running cost of production of 40% ferric chloride solution using the proposed cleaner electrochemical production technology will be 241.66$/ton and the suggested price is 450$/ton with a net profit of 156$ with high cash flow using the proposed green technology. The proposed methodology for FeCl3 production reviews the importance of using cleaner production and sustainable development indicators.

Do firm characteristics affect debt capacity? Evidence in CEO succession

ABSTRACT Should firms decrease or increase their debt capacity after professional CEO succession? Examining a sample of all publicly traded firms from 1991 to 2016 in Taiwan, this research finds that firms with professional CEO successors tend to raise less debt and consider the succession of professional managers to be more conservative because they are afraid of being monitored more severely. From the perspectives of firms’ characteristics, those with professional CEO successors and high cash holdings and investment levels are more likely to increase their debt capacity, while those of a larger size and higher post-succession profitability volatility decrease their ability at raising debt. Finally, we hand-collect data and develop a novel method to identify the real founders and reconfirm our empirical evidence. Our findings present financial implications for boards of directors which they can evaluate firms’ cash holdings, investment level, firm size, and profit volatility before deciding on whether to name a CEO successor to take over their firms.

Assessment of Constraints and Opportunities of Tea Out-Growers in South West Ethiopia

This research attempted to generate useful information on tea out growers’ constraints and opportunities in tea production and marketing, which helps governmental institutions to assess their activities and redesign their operations. The research was done by interviewing tea out growers surrounding the two major tea plantations Wush Wush and Gumero in south west Ethiopia. Data was collected from 120 randomly selected households. Data was analyzed using descriptive statistics and Relative Severity Index to analyze constraints. The obtained result showed that, out-growers on average allocated 1.37 ha land to produce tea. They plucked on average 295 kg/ha export standard or 731 kg/ha local standard green tea leaves in one harvest in main season. Relative Severity index analysis revealed that out growers’ major constraints of tea production were high price and timely availability of inputs, shortage of inputs, high cost of production, need intensive plot management, lack of capital, no government intervention and extension service and lack of training. However, they have good opportunities in obtaining frequent income almost throughout the year, high cash income, low risk of animal damage and theft. Keywords : Tea out growers, Gumero, Wush Wush, Relative Severity Index, constraints DOI: 10.7176/DCS/11-6-02 Publication date: June 30 th 2021

Cash Dividend Behaviors around Private Placements in China: Interactions between Two Information-Releasing Events

We investigate the information role and the information interaction of cash dividends around equity private placements for China’s publicly listed firms from 2004 to 2019. Our results show that firms are more likely to allocate higher cash dividends when private placements are nearer, possibly to build a favorable information environment for subsequent equity refinancing. Using a propensity score matching (PSM) approach, the results show that firms usually do not increase cash dividends for the compensation of illiquidity in the lockup period following private placement. The persistently low cash dividends after the lockup period rule out the suspicion of tunneling (via excessive payouts) resulted by private placements. In the meantime, we find that private placements positively affect firm performance. This could be why managers find conveying information via dividends redundant. We also find that announcement returns for cash dividends paid by firms with private placements are higher compared to their peers.

Overview of Indonesian Law in the Purchase Transaction of Home Ownership Credit (KPR)

Home is a basic need that is very important for everyone. However, some people still do not own their own homes. The contributing factor is the high cash price of the house. Therefore, the government through the minister of public housing created a Home Ownership Credit (KPR) program. This KPR program is aimed at low-income people, which is called subsidized KPR. the number of banks implementing the KPR purchase program. This thesis research concerns the KPR transaction system carried out by BTN Syariah North Sumatra and a review of Islamic law on the KPR transaction system at BTN Syariah North Sumatra. This type of research uses normative legal research with a conceptual approach to understanding the KPR BTN Syariah transaction system that uses Islamic principles. The results and discussion of this research are the KPR transaction system carried out by BTN Syariah using the murabahah and istishna sale and purchase contracts. A legal review in Indonesia of this sale and purchase agreement is with 3 approaches consisting of the review of the terms of sale and purchase, the legal terms of sale and purchase, and the terms of buying and selling credit. For the Istishna contract, BTN Syariah cannot use this contract because BTN Syariah is not a producer but a trader. In conclusion, the KPR transaction scheme carried out by BTN Syariah is not essentially a sale and purchase of murabahah or istishna, but of accounts payable / qardh. Keywords: Indonesian law, mortgage, legal relief.

The Determinants of the Financial Reporting Quality: Empirical Evidence for Romania

The issue of the financial reporting quality has aroused the interest of several researchers whose views converge on the idea that it can be influenced both by factors related to the internal environment of the company, the corporate governance system, the activity of auditors and not only, and also by macroeconomic factors, such as the legal and political system of a country or community or certain accounting/ tax policies. The objective of the research is to highlight, starting from a model validated by Iatridis (2011) for companies in the United Kingdom, the way in which microeconomic factors influence the financial reporting quality of Romanian companies listed on the Bucharest Stock Exchange. The analysis is carried out for the 2013-2019 period. The results indicate that the companies that produce high quality financial reports are large and generally have a high operating cash flow rate, relatively low provisions and disclose more information. Also, these companies are audited predominantly by auditors who are not part of the BIG 4 group.

Negative operating cash flows and investment inefficiency

PurposeThe purpose of this paper is to identify whether negative operating cash flows are related to investment inefficiency, and specifically whether they are related to subsequent overinvestment and if this relationship is driven by agency problems within the firm.Design/methodology/approachThe study conducts fixed effect regressions, testing the relationship between negative operating cash flows and the firm’s subsequent investment inefficiency. The relationship is further examined for all firms based on size, corporate governance and cash holdings – all of which are related to agency problems.FindingsThe proportion of firms reporting negative operating cash flows has been increasing over time and is positively related to subsequent investment inefficiency. This increase is explained not only by the rise in investment of intangible assets. The positive relationship is not explained by the firm size or corporate governance, but is related to cash holdings. These results are consistent across four different measures of firm investment.Practical implicationsThe percentage of publicly traded firms with negative operating cash flows has never been higher. This paper is one of the first to identify factors that may be contributing to this rise.Originality/valueThis study extends prior findings by identifying previously unexplored factors related to the rise in firms with negative operating cash flows. The rise in investment of intangible assets does not explain the increase alone. High cash holdings also influence the rise in negative operating cash flows.

Persistent negative cash flows, staged financing, and the stockpiling of cash balances

Firms with negative net cash flows (NCFs) play an empirically important role in recent decades’ increase in the average cash-balance ratio of publicly held non-financial firms. Since 1971, negative NCFs have become much more pervasive, persistent, and greater in magnitude, and these patterns hold within the growing set of firms that have high intangible capital. In recent years, firms with negative NCFs tend to build cash balances through frequent equity offerings. The high cash balances tend to be transitory as subsequent negative NCFs lead firms to rapid cash-balance drawdowns, often followed by new stock sales and cash stockpiling of the proceeds. We conclude that funding needs and staged equity financing by negative NCF firms are central features of the secular rise in the average cash-balance ratio.