A penny saved
(2016) FEKN90 20161Department of Business Administration
- Abstract
- Abstract
Title: A penny saved: Do cash holdings reduce profitability? Seminar date: May 25, 2016
Course: FEKN90, For the degree of: Master of Science in Business and Economics, 30HP
Authors: Andreas Lagerstedt, Oscar Ljunggren Westlundh, Truls Törnqvist
Advisor: Anna Glenngård
Keywords: Cash holdings, profitability, Stockholm stock exchange, overinvestment, Jensen’s free cash flow hypothesis.
Purpose: The overall purpose of this study is to investigate if profitability is negatively affected by cash holdings for firms on the Swedish market. The study will also determine if there are any differences in this aspect before, during and after the financial crisis of 2008-2009.
Methodology: This study uses a quantitative and... (More) - Abstract
Title: A penny saved: Do cash holdings reduce profitability? Seminar date: May 25, 2016
Course: FEKN90, For the degree of: Master of Science in Business and Economics, 30HP
Authors: Andreas Lagerstedt, Oscar Ljunggren Westlundh, Truls Törnqvist
Advisor: Anna Glenngård
Keywords: Cash holdings, profitability, Stockholm stock exchange, overinvestment, Jensen’s free cash flow hypothesis.
Purpose: The overall purpose of this study is to investigate if profitability is negatively affected by cash holdings for firms on the Swedish market. The study will also determine if there are any differences in this aspect before, during and after the financial crisis of 2008-2009.
Methodology: This study uses a quantitative and deductive method using panel data. Data was mainly gathered using Thomson reuters datastream. The regression method is Ordinary Least Squares and is performed using eViews.
Theoretical perspectives: The theoretical perspective is based on costs associated with the principal-agent problem described in Jensen's free cash flow hypothesis (1986).
Empirical foundation: This study is based on 108 firms listed on the Stockholm stock exchange and covers the years 2004-2014. Profitability is the dependent variable and the variable investigated is cash holdings. Additional independent variables included are leverage, size and Tobin’s Q.
Conclusions: The regression showed that no significant relationship between cash holdings and profitability could be found. No significant difference in this relationship could be found between the time periods before, during and after the financial crisis. (Less) - Abstract (Swedish)
- Sammanfattning
Titel: A penny saved: Does cash holdings reduce profitability?
Seminariedatum: May 25, 2016
Kurs: FEKN90, For the degree of: Master of Science in Business and Economics, 30HP
Författare: Andreas Lagerstedt, Oscar Ljunggren Westlundh, Truls Törnqvist
Handledare: Anna Glenngård
Nyckelord: Cash holdings, profitability, Stockholm stock exchange, overinvestment, Jensen’s free cash flow hypothesis.
Syfte: Det primära syftet med studien är att undersöka om lönsamhet är negativt relaterat till likvida medel på den svenska marknaden. Studien kommer även undersöka om det föreligger skillnader i denna aspekt mellan perioderna före, under och efter den finansiella krisen 2008- 2009.
Metod: Studien har en... (More) - Sammanfattning
Titel: A penny saved: Does cash holdings reduce profitability?
Seminariedatum: May 25, 2016
Kurs: FEKN90, For the degree of: Master of Science in Business and Economics, 30HP
Författare: Andreas Lagerstedt, Oscar Ljunggren Westlundh, Truls Törnqvist
Handledare: Anna Glenngård
Nyckelord: Cash holdings, profitability, Stockholm stock exchange, overinvestment, Jensen’s free cash flow hypothesis.
Syfte: Det primära syftet med studien är att undersöka om lönsamhet är negativt relaterat till likvida medel på den svenska marknaden. Studien kommer även undersöka om det föreligger skillnader i denna aspekt mellan perioderna före, under och efter den finansiella krisen 2008- 2009.
Metod: Studien har en kvantitativ och deduktiv metod och använder paneldata. Thomson reuters datastream har varit den huvudsakliga datakällan och regressionen har utförts genom metoden minsta kvadrat metoden i programmet eViews.
Teoretiska perspektiv: Teorin som ligger till grund för studien baserar sig på kostnader hänförbara till principal-agent problemet som beskrivs i Jensen’s free cash flow hypothesis (1986)
Empiri: Studien baseras på 108 företag noterade på Stockholmsbörsen och inkluderar åren 2004- 2014. Lönsamhet är den beroende variabeln och den undersökta variabeln är likvida medel. De andra oberoende variablerna är skuldsättning, storlek och Tobin’s Q.
Resultat: Regressionen visade inget signifikant samband mellan likvida medel och lönsamhet. Undersökning mellan perioderna före, under och efter den finansiella krisen kunde inte påvisa någon signifikant skillnad mellan perioderna. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/8880317
- author
- Johansson Lagerstedt, Andreas LU ; Ljunggren Westlundh, Oscar and Törnqvist, Truls
- supervisor
- organization
- alternative title
- Does cash holdings reduce profitability?
- course
- FEKN90 20161
- year
- 2016
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Cash holdings, profitability, Stockholm stock exchange, overinvestment, Jensen’s free cash flow hypothesis
- language
- English
- id
- 8880317
- date added to LUP
- 2016-09-13 15:27:42
- date last changed
- 2016-09-13 15:27:42
@misc{8880317,
abstract = {{Abstract
Title: A penny saved: Do cash holdings reduce profitability? Seminar date: May 25, 2016
Course: FEKN90, For the degree of: Master of Science in Business and Economics, 30HP
Authors: Andreas Lagerstedt, Oscar Ljunggren Westlundh, Truls Törnqvist
Advisor: Anna Glenngård
Keywords: Cash holdings, profitability, Stockholm stock exchange, overinvestment, Jensen’s free cash flow hypothesis.
Purpose: The overall purpose of this study is to investigate if profitability is negatively affected by cash holdings for firms on the Swedish market. The study will also determine if there are any differences in this aspect before, during and after the financial crisis of 2008-2009.
Methodology: This study uses a quantitative and deductive method using panel data. Data was mainly gathered using Thomson reuters datastream. The regression method is Ordinary Least Squares and is performed using eViews.
Theoretical perspectives: The theoretical perspective is based on costs associated with the principal-agent problem described in Jensen's free cash flow hypothesis (1986).
Empirical foundation: This study is based on 108 firms listed on the Stockholm stock exchange and covers the years 2004-2014. Profitability is the dependent variable and the variable investigated is cash holdings. Additional independent variables included are leverage, size and Tobin’s Q.
Conclusions: The regression showed that no significant relationship between cash holdings and profitability could be found. No significant difference in this relationship could be found between the time periods before, during and after the financial crisis.}},
author = {{Johansson Lagerstedt, Andreas and Ljunggren Westlundh, Oscar and Törnqvist, Truls}},
language = {{eng}},
note = {{Student Paper}},
title = {{A penny saved}},
year = {{2016}},
}