Impact of Cash Holding on Firm Value with Mediating Effect of Investment Decision
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Abstract
Cash management is the most important factor for corporation, organization need to know exactly their operating expense and investment opportunity while managing their cash, high cash ratio is not good for companies as well as low cash position also a point of concern for corporation. company need to manage its cash and maintain a proper balance and tradeoff between low and high level of cash. To achieve these objective current research studies is focus on the relationship between cash holding and firm value with mediating effect of investment decision. Where cash holding is an independent variable while firm value is a dependent variable. Current study is focused on quantitative method, deductive approach and on Positivism philosophy. Fifteen years’ panel data from 2009 -2023 were collected from none financial sector of PSX. Collected data were analysis through STATA software. two hypotheses and research questions were developed to be tested statistically. The result suggested that cash holding has significant and positive relationship with firm value while investment decision significantly mediate the relationship between cash holding and firm value, where R square value is 0.377 indicate that 37.7 % change come in firm value through cash holding and coefficient value of cash figure and firm value is 7.64 and p value is 0.00 show the significant and positive relationship between the two variables. Mean one unit change in cash figure will bring 7.64-unit positive change in firm value.
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