Document Type : Original Article
Authors
1 Department of Accounting, Payame Noor University, Tehran, Iran
2 MSc.Student, Department of Accounting, Payame Noor University.Tehran, Iran
Abstract
The aim of the present study is to investigate the effect of investment in fixed assets on the speed of cash holding adjustment. The present study is applied and from the methodological perspective, the correlation is of a causal (post-event) type. The statistical population of the study is all companies listed on the Tehran Stock Exchange, and using the criterion-based screening sampling method, 144 companies were selected as the research sample and were studied over a 10-year period between 2014 and 2023. The results of the research hypothesis test showed that the speed of cash holding adjustment among the sample companies is about 77 percent. Companies cover the gap between actual and optimal cash holdings on average at the same speed annually. Also, investment in fixed assets affects the speed of cash holding adjustment and reduces the speed of adjustment. In fact, given the ability to collateralize fixed assets, companies with higher fixed asset investments move towards optimal cash holdings at a slower rate and do not need to hold as much cash. Based on the results, it can be stated that companies that allocate a higher share of their investment to fixed assets have a lower need to hold large amounts of cash to manage liquidity risk or potential investment opportunities due to the ability to use these assets as collateral for financing. As a result, these companies move towards optimal cash holdings at a slower rate, because fixed assets play an alternative or complementary role in managing financial risk and securing resources and reduce the immediate pressure to quickly adjust cash reserves.
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