This study seeks to explain the tendency of company cash holding by
examining the factors that influence it. Growth opportunity, leverage, level of
non-cash liquid asset, cash flow, cash volatility, firm size, and devidend payment
are independent variables of this reasearch to learn the effect on cash holding.
The observation did by using quantitative method on secondary data of 69
manufacturing companies listed in Indonesia Stock Exchange during the period of
2007 to 2013. Multiple linear regression analysis was used to measure the
relations between independent variables and dependent variable.
This study concluded that growth opportunity, level of non-cash liquid
asset, cash flow, and devidend payment have a positive effect on cash holding,
while leverage has a negative effect. Companies increase their cash balance when
they have a lot of investment opportunities, gain a large amount of cash flow, and
pay devidends. However, they decrease it if they have a good ability to obtain debt
or loan. Thus, in the case of manufacturing companies in Indonesia, cash holding
is affected by operating, investing, and financing activities simultaneously
