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

Journal of Marketing Management and Consumer Behavior, Vol. 2, Issue 1 (2017) 90-112

23 Pages Posted: 21 Feb 2018

See all articles by Nestor Amahalu

Nestor Amahalu

Nnamdi Azikiwe University - Department of Accountancy

Beatrice O Ezechukwu

Federal Polytechnic Oko

Date Written: February 18, 2017

Abstract

This study assesses the extent to which cash holding affects the financial performance of quoted insurance firms in Nigeria. Three hypotheses were formulated in line with the 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 statistically 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 manage 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 Holdings, Tobin's Q, Growth Opportunities

JEL Classification: M13, M41, M51

Suggested Citation

Amahalu, Nestor and Ezechukwu, Beatrice O, Effect of Cash Holding on Financial Performance Of Selected Quoted Insurance Firms in Nigeria (February 18, 2017). Journal of Marketing Management and Consumer Behavior, Vol. 2, Issue 1 (2017) 90-112. Available at SSRN: https://ssrn.com/abstract=3125603

Nestor Amahalu (Contact Author)

Nnamdi Azikiwe University - Department of Accountancy ( email )

Awka, Anambra 23400
Nigeria
+2348063393668 (Phone)

Beatrice O Ezechukwu

Federal Polytechnic Oko

PMB 021 Aguata
Anambra +234
Nigeria

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