“Covid-19, Cash Holding and Financial performance” “Applied study on Telecom Egypt”

نوع المستند : المقالة الأصلية

المؤلفون

Professor of Financial Accounting Faculty of Business Ain Shams University

المستخلص

Cash holdings play a pivotal role amid the COVID-19 attack. This shock increased liquidity risk for many firms and generated an unprecedented increase in the demand for liquidity for affected firms. In order to cope with the operational risks caused by COVID-19 and ensure that firms can smoothly survive the pandemic, managers tend to increase firms’ cash holding level in the short term through bank loans or equity financing to ease the cash flow pressures. Since COVID-19 brought short-term uncertainties into operating activities, they must keep the necessary liquidity level of the firms to finance fixed costs and expenses. Holding a certain amount of cash would assist companies in maintaining liquidity for emergencies, avoiding the need for external financing. However, the financing capacity of the firms is different, so it is debatable whether the companies can raise the cash in time. This study empirically examines the impact of Coronavirus pandemic on Telecom Egypt cash holding and consequently firm financial performance by comparing cash holding levels and the related firm performance measured by ROA, ROE and EPS before, during and after the COVID-19 pandemic in the period from 2017 to 2021. The theoretical framework related to this issue has been mentioned and a relevant literature is reviewed.
In addition, findings of the research are discussed in relation to research hypotheses concluding that the corona virus had no significant effect on Telecom Egypt cash holdings, and there is no significant relation between Telecom Egypt cash holdings and its financial performance indicators of ROA, ROE, and EPS tested via SPSS version 26.
 

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