Determinants of Corporate Cash Holdings in The Consumer Goods Sector in Indonesia

Abstract

The objective of this research is to determine the factors influencing corporate cash holdings in Indonesian consumer goods companies. The research problem focuses on the effects of net working capital, profitability, leverage, cash flow, and firm size on corporate cash holdings. The sample consists of 49 consumer goods firms list on the Indonesia Stock Exchange (IDX) in 2020–2024, thus yielding a total of 245 firm-years. Panel data regression was estimated using the Random Effect Model with EViews 9.0. The findings show that profitability has a positive and significant impact on corporate cash holding. The net working capital, leverage and cash flow have a negative significant impact on the cash holding, while firm size does not significantly affect it. These results emphasize the role of financial performance, liquidity policy and capital structure in determining firm cash holdings.