Major Accounting And Financial Direction Of Finance Thesis
Major Accouting And Financedirection Of Finance The Thesis Also Wan
Major: accounting and finance. The thesis focus is on finance, specifically on modeling financial data. The process involves collecting database data, performing feedback and modifications during the progress, and organizing the data for modeling purposes. Currently, the student is preparing a thesis proposal, approximately 3000 words, which needs to be submitted for approval before beginning the main research and writing. The primary topic selected is "cash holding levels," but the specific title has not yet been finalized. The research will avoid questionnaires and instead utilize existing financial database data, employing EViews software for modeling. The choice of subject aligns with the student's major in accounting and finance, and the topic will be confirmed and communicated to the advisor and client once decided.
Paper For Above instruction
Introduction
The focus of this thesis is to investigate the determinants and implications of cash holding levels among firms, utilizing financial data models. Cash holdings, defined as the proportion of cash and cash equivalents in firm assets, are a critical aspect of corporate financial management. They influence liquidity, investment opportunities, and risk management strategies. Understanding the factors affecting cash holdings helps inform managerial decisions and policy formulations geared toward optimizing firm value.
Literature Review
Existing literature has extensively examined cash holding theories, including the precautionary motive, transaction motive, and agency costs (Opler et al., 1999; Kim et al., 2006). The precautionary motive suggests firms hold excess cash to mitigate liquidity risks, especially during periods of financial uncertainty. Transaction motives focus on cash needed for daily operations, while agency issues revolve around conflicts of interest between managers and shareholders, influencing cash management policies (Dittmar et al., 2003). Empirical studies reveal that factors such as firm size, profitability, growth opportunities, leverage, and market capitalization significantly impact cash holdings (Harford et al., 2008).
Research Objectives and Methodology
The primary objective of this research is to analyze the determinants influencing cash holding levels across firms within a specific industry or market. The methodology involves utilizing existing financial data from reputable databases such as COMPUSTAT or Wind Financial Database. The study will employ panel data analysis to examine the relationship between cash holdings and potential explanatory variables. EViews software will be used for econometric modeling, including fixed effects or random effects models, to control for unobserved heterogeneity.
Data collection will focus on firm-level financial statements, including balance sheets and income statements, covering a multi-year period to observe trends and patterns. The variables considered will include firm size, profitability (ROA), leverage, growth opportunities (Tobin’s Q), cash flow, and industry classification. The model will exclude primary data collection through questionnaires, relying solely on secondary data sources.
Expected Contributions
This research aims to contribute to the existing body of knowledge by providing updated empirical evidence on the factors affecting cash holding levels in the current economic environment. The findings could aid managers in optimizing cash reserves, potentially leading to improved firm performance and shareholder value. Additionally, the study may offer insights into how macroeconomic variables influence corporate liquidity management, providing a foundation for policymakers and financial analysts.
Significance of the Study
Understanding cash holding behavior is vital for financial stability and strategic decision-making. In volatile economic conditions, firms’ liquidity management becomes even more critical. This study offers a comprehensive analysis using robust databases and econometric modeling, which can serve as a reference for future research and practical application in finance and accounting sectors.
Conclusion
The proposed thesis on cash holding levels aims to utilize database modeling to uncover the key determinants affecting corporate liquidity. Employing EViews for econometric analysis allows for rigorous testing of hypotheses based on existing financial data. The expected insights will help optimize cash management strategies, contributing valuable knowledge to the fields of accounting and finance.
References
Dittmar, A., Mahrt-Smith, J., & Servaes, H. (2003). International Evidence on Large Shareholder Ownership and Corporate Value. The Journal of Finance, 58(1), 635-661.
Harford, J., Mansi, S. A., & Maxwell, W. F. (2008). Corporate governance and firm cash holdings. Journal of Financial Economics, 87(3), 535-555.
Kim, J. B., Mauer, D. C., & Sherman, A. E. (2006). Bank consolidation and the cost of banking. Journal of Banking & Finance, 30(1), 3-12.
Opler, T., Pinkowitz, L., Stulz, R., & Williamson, R. (1999). The determinants and implications of corporate cash holdings. Journal of Financial Economics, 52(1), 3-46.
Other relevant references to be added during actual research, including recent studies and data sources for comprehensive analysis.