The Influence of Operating Cash and Idle Cash on Corporate Performance

• Main Authors: Huang, Hong-Hu, 黃弘湖
• Other Authors: Wang, Sue-Fung
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/28602963996477882249

碩士 === 國立交通大學 === 管理科學系所 === 104 === There are many kinds of reason for companies to hold the cash. According to Keynes’s research, corporates have three motives to hold cash asset, (1) transaction-motive (2) precautionary-motive (3) speculative-motive. And then, we can distribute cash into operating-cash and idle-cash. Operating cash is used to satisfy the cash demand in corporate’s daily business, it is for the motive of transaction. Idle cash is for precautionary-motive and speculative-motive. Cash is an important asset, but it is non-profitable asset for company. If firms hold too much cash, it will cause the operating performance inefficiently. In order to find the relationship between cash and operating performance, we separate the cash into operating-cash and idle-cash by three different ways, including 1) 2% of sales 2) operating cycle 3) cash cycle. In the sequence, we found that if the companies hold more idle-cash, the ROE and ROA of companies will be significant lower. And the idle-cash has significantly negative impact to company’s operating performance in technology industry, but it doesn’t exist in traditional industry. And, the impact of idle cash to operating performance does not have difference in big asset size companies and small asset size companies. Also, we found that if the company’s holding cash didn’t satisfy the predicted operating-cash, the operating performance will be significant lower than the companies who have enough cash for operating.