Cash Position Forecasts and Stock Market Portfolio Returns

• In Event: Session D: Financial Accounting and Reporting

Abstract

Cash forecasting is an important issue, and is the focus of this study. The Wall Street Journal has published articles (1995, 2009) dealing with the record levels of cash held by large publicly traded companies asserting that cash positions may be excessive. In any event, the ability to forecast cash holdings is an important element in deciding where to invest consistent with one’s predilection. Our study demonstrates a forecasting model with firm-specific variables. The results indicate a strong model while economic conditions are relatively stable; however, with significant turbulence (i.e. the market failure in 2008), the model is not as robust.

Authors

• Richard Alltizer, University of Central Oklahoma

• Zane L Swanson, University of Central Oklahoma