Implications for Companies and Investors

Oct 13, 2025 by magicalceylontours.com 0 views

Introduction

The property and real estate subsector is a significant contributor to the Indonesian economy, with numerous companies listed on the Indonesia Stock Exchange (IDX). Effective cash management is crucial for these companies to achieve their business goals and maintain a competitive edge. However, the factors influencing cash holding in this subsector are complex and multifaceted. This study aims to analyze the effect of cash flow, leverage, net working capital, growth opportunities, and firm size on cash holding in property and real estate subsector companies listed on the IDX for the 2016-2020 period.

Methodology

This study employed a quantitative approach, using a sample of 29 property and real estate subsector companies listed on the IDX during the study period. The data was obtained from documentation studies, including public reports accessed from various sources such as the company's website. Descriptive statistical methods and multiple linear regression were used to analyze the data.

Results

Cash Flow, Leverage, and Company Size: Unexpected Influence

The results of this study revealed that cash flow has a negative and insignificant influence on the number of company cash. This means that an increase in cash flow is not always accompanied by an increase in the amount of cash stored. This condition may occur because the company chooses to allocate cash flow obtained for investment, project development, or debt payments.

Another interesting finding is that leverage has a positive but not significant influence on the amount of cash. That is, the higher the leverage (debt to capital ratio), does not always mean the company will store more cash. Most likely companies with high leverage are more focused on maximizing asset returns, so that their top priorities do not store large quantities.

The company's size turns out to have a negative and significant influence on the amount of cash. This indicates that companies with large sizes tend to store less cash. Most likely large companies already have easier access to external funding sources, so they are not too dependent on internal cash.

Working Capital and Growth Opportunities: Strategic Drivers

The results of the study revealed that working capital has a positive and significant influence on the number of company cash. This shows that companies with strong working capital tend to store more cash. Strong working capital provides flexibility for companies to run operations and take advantage of new business opportunities.

Growth opportunities show negative but not significant effects on the amount of cash. This indicates that companies with high growth opportunities do not always store more cash. It is possible that companies with high growth opportunities are more aggressive in investing cash to maximize business growth.

Implications for Companies and Investors

This study provides important insights for property and real estate subsectors, especially in terms of cash management. Companies need to pay attention to the influence of the factors studied in this study to optimize cash management strategies and achieve business goals.

For investors, this research provides useful information in assessing the company's financial performance. Investors can utilize information about the amount of cash and the factors that influence it to determine more effective investment strategies.

Conclusion

This study shows that factors such as cash flow, leverage, working capital, growth opportunities, and company size have complex and diverse influences on the amount of cash stored by property and real estate subsectors in Indonesia. Knowledge of the influence of these factors will help companies and investors in making more appropriate strategic decisions and improve business performance.

Recommendations for Future Research

This study provides a foundation for future research on cash management in the property and real estate subsector. Future studies can explore the impact of other factors, such as market conditions, industry trends, and regulatory changes, on cash holding in this subsector. Additionally, research can be conducted to investigate the effectiveness of cash management strategies in different company sizes and types.

Limitations of the Study

This study has several limitations. Firstly, the sample size is relatively small, which may limit the generalizability of the findings. Secondly, the study only focuses on property and real estate subsector companies listed on the IDX, which may not be representative of the entire industry. Finally, the study only analyzes the effect of cash flow, leverage, working capital, growth opportunities, and company size on cash holding, which may not capture other important factors influencing cash management.

References

[1] Indonesia Stock Exchange. (2020). List of Companies Listed on the IDX.
[2] Company reports and financial statements accessed from various sources such as the company's website.
[3] Descriptive statistical methods and multiple linear regression used to analyze the data.

Keywords

Cash flow
Leverage
Net working capital
Growth opportunities
Firm size
Cash holding
Property and real estate subsector
Indonesia Stock Exchange
Cash management
Strategic decision-making
Business performance

Abstract

This study analyzes the effect of cash flow, leverage, net working capital, growth opportunities, and firm size on cash holding in property and real estate subsector companies listed on the Indonesia Stock Exchange for the 2016-2020 period. The results show that cash flow has a negative and insignificant influence on the number of company cash, while leverage has a positive but not significant influence. Working capital has a positive and significant influence on the number of company cash, while growth opportunities show negative but not significant effects. The study provides important insights for companies and investors in making more appropriate strategic decisions and improving business performance.

Frequently Asked Questions

Q: What is the main objective of this study?

A: The main objective of this study is to analyze the effect of cash flow, leverage, net working capital, growth opportunities, and firm size on cash holding in property and real estate subsector companies listed on the Indonesia Stock Exchange for the 2016-2020 period.

Q: What is the sample size of this study?

A: The sample size of this study is 29 property and real estate subsector companies listed on the Indonesia Stock Exchange during the study period.

Q: What are the key findings of this study?

A: The key findings of this study are:

Cash flow has a negative and insignificant influence on the number of company cash.
Leverage has a positive but not significant influence on the number of company cash.
Working capital has a positive and significant influence on the number of company cash.
Growth opportunities show negative but not significant effects on the number of company cash.
Firm size has a negative and significant influence on the number of company cash.

Q: What are the implications of this study for companies and investors?

A: The implications of this study for companies and investors are:

Companies need to pay attention to the influence of the factors studied in this study to optimize cash management strategies and achieve business goals.
Investors can utilize information about the amount of cash and the factors that influence it to determine more effective investment strategies.

Q: What are the limitations of this study?

A: The limitations of this study are:

The sample size is relatively small, which may limit the generalizability of the findings.
The study only focuses on property and real estate subsector companies listed on the Indonesia Stock Exchange, which may not be representative of the entire industry.
The study only analyzes the effect of cash flow, leverage, working capital, growth opportunities, and firm size on cash holding, which may not capture other important factors influencing cash management.

Q: What are the recommendations for future research?

A: The recommendations for future research are:

Future studies can explore the impact of other factors, such as market conditions, industry trends, and regulatory changes, on cash holding in the property and real estate subsector.
Research can be conducted to investigate the effectiveness of cash management strategies in different company sizes and types.

Q: What are the keywords associated with this study?

A: The keywords associated with this study are:

Cash flow
Leverage
Net working capital
Growth opportunities
Firm size
Cash holding
Property and real estate subsector
Indonesia Stock Exchange
Cash management
Strategic decision-making
Business performance

Q: What is the abstract of this study?

A: This study analyzes the effect of cash flow, leverage, net working capital, growth opportunities, and firm size on cash holding in property and real estate subsector companies listed on the Indonesia Stock Exchange for the 2016-2020 period. The results show that cash flow has a negative and insignificant influence on the number of company cash, while leverage has a positive but not significant influence. Working capital has a positive and significant influence on the number of company cash, while growth opportunities show negative but not significant effects. The study provides important insights for companies and investors in making more appropriate strategic decisions and improving business performance.

Conclusion

This Q&A article provides a summary of the key findings, implications, and limitations of the study, as well as recommendations for future research. The study provides important insights for companies and investors in making more appropriate strategic decisions and improving business performance.