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
Date Written: February 18, 2017
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: Suggested Citation