CASH STUDY: A CASE STUDY ABOUT CASH AND CASH EQUIVALENTS OF LISTED COMPANY IN INDONESIA STOCK EXCHANGE

• Main Author: PUTRA SIHOMBING (NIM : 29108049); Pembimbing: Erman Sumirat, S.E., M.Buss., Ak, AWALSYAH
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/15097
• Institution: Institut Teknologi Bandung

In order to raise future investment opportunities, management should prepare its company financial well. Time-schedule of debt payment, cash conversion cycle <br /> <br /> <br /> characteristic, dividend payment plan, cash flow uncertainty in the future are something that company has to be calculated in order to fulfill liquidity needs well. This planning is also to be important thing for this present, for example, for maintenance factories and <br /> <br /> <br /> vehicles, dividend payment, and for operational expenses. The level of Cash and Cash Equivalents is affected by some factors. The factors could be explained by theories, such as Trade-off Model, Myers' Pecking Order Theory, and Jensen’s Free Cash Flow Theory. Some researches about this topic are a lot, such as Opler et.al. (1999), Dittmar et.al. (2003), Faulkender (2004), Kytonen (2005), and Custodio (2005). This research is focused to some determinants that affect the amount of Cash and Cash Equivalents' listed company in Indonesia Stock Exchange between 2004-2008. This research does not classify the object in to industry in order to compare the result(s) with researches before that did not classify, too. Among relevant determinants are Operating <br /> <br /> <br /> Cash Flow, Financial Leverage, Return on Assets, Cash Conversion Cycle, Dividend Payment, Availability Cash Substitute, Firm-size, and Market-to-Book Ratio. On the <br /> <br /> <br /> other hand, this research also studies about existence of companies' Nonoperating (Excess) Cash using the measurement Cash and Cash Equivalents-To-Revenues, as <br /> <br /> <br /> Damodaran (2006) talk about. The result shows that there are seven determinants affected from the eight <br /> <br /> <br /> determinants. The most affected determinants are Operating Cash Flow, Financial Leverage, Cash Conversion Cycle, and Dividend Payment. The three last determinants <br /> <br /> <br /> are Availability Cash Substitute, Firm-size, and Market-to-Book Ratio. We also find that some of the listed companies have Nonoperating (Excess) Cash. By this research, we hope it gives some input to interest parties in cash management.