Effect of Cash Holding on Financial Performance of Selected Quoted Insurance Firms in Nigeria

Contemporary Issues in Business Management: A Multidisciplinary Approach (Book of Readings), 2017

28 Pages Posted: 28 Jul 2017 Last revised: 10 Sep 2017

See all articles by Nestor Amahalu

Nestor Amahalu

Nnamdi Azikiwe University - Department of Accountancy

Ezechukwu Beatrice

Federal Polytechnic, Oko

Date Written: May 25, 2017

Abstract

This study assesses the extent at which cash holding affects financial performance of quoted insurance firms in Nigeria. Three hypotheses were formulated in line with objective of the study; Ex-post facto research design and time-series data were adopted and the data for the study were obtained from fact books, annual reports and account of the quoted insurance companies under study. Pearson coefficient of correlation and multiple regression were applied for the test of the three hypothesis formulated with aid of STATA 13 statistical software. Findings showed that cash holding (proxy by cash to total book value of assets and cash) has a positive and statistical significant effect on financial performance (proxy by Return on Asset, Return on Equity and Tobin’s Q) at 5% significant level. Based on these findings, the study recommends among others that insurance companies should adequately mange how they re-invest their resource so as to prevent any form of mismanagement of resource that can guarantee their existence in business.

Keywords: Cash holding, Liquidity management and financial performance

JEL Classification: M17, M24, M33

Suggested Citation

Amahalu, Nestor and Beatrice, Ezechukwu, Effect of Cash Holding on Financial Performance of Selected Quoted Insurance Firms in Nigeria (May 25, 2017). Contemporary Issues in Business Management: A Multidisciplinary Approach (Book of Readings), 2017. Available at SSRN: https://ssrn.com/abstract=3008491

Nestor Amahalu (Contact Author)

Nnamdi Azikiwe University - Department of Accountancy ( email )

Awka, Anambra 23400
Nigeria
+2348063393668 (Phone)

Ezechukwu Beatrice

Federal Polytechnic, Oko ( email )

PMB 021 Aguata
Anambra +234
Nigeria
08033887708 (Phone)

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