Determinants of Corporate Liquidity - An Analysis of Cash Holdings (original) (raw)

2013, IOSR Journal of Business and Management

The objective of the study is to determine and measure how and to what extent size of the firm, net working capital, leverage, cash conversion cycle and sales growth affect the cash holdings of corporate organizations. The study selected 395 non financial companies of Pakistan listed on Karachi stock exchange, for the purpose of examining the relationships. Financial data for 6 years period was included in analysis covering years 2005-2011. Descriptive statistics, Pearson correlation, multiple regression and ANOVA were used to conduct the analysis. The results demonstrated significant relationship between cash holdings and the selected variables except sales growth. This study will contribute in understanding the factors affecting corporate liquidity by financial managers as well as the investors seeking to invest in Pakistani companies.