Effect of Growth Opportunity, Cash Flow and Capital Expenditure to Cash Holding

H2 : Cash Flow affects Cash Holding.

Capital Expenditure

Capital Expenditure to measure the influence and relationship with cash holdings. Capital expenditure describes the level of costs that must be used by a company to support physical assets within a company, including costs to maximize capacity and the economic useful life of an asset. The formula applied to calculate capital expenditure by dividing the capital expenditure scale by the total assets owned by a company is as follows:

Capital Expenditure = ������������������������������������ �������������������������������������� Fixedassets

����������:��������������������������2019

Capital expenditure is one of the important things for the growth and development of a company, therefore it is likely that the company will often allocate capital expenditure into its budget. Capital expenditure or capital expenditure occurs when companies make expenditures to invest in fixed assets. When carrying out an investment plan on fixed assets, the company uses cash to support the investment so that companies that have a high level of capital expenditure will issue large amounts of cash to finance these expenses.

The higher the value of capital expenditure indicates that more cash must also be issued for investment needs so that companies have a tendency to hold cash in investment financing. Conversely, if the value of capital expenditure is low, then the need for cash is less and the company does not need to hold cash, which results in less cash owned by the company.

H3: Capital Expenditure affects Cash Holding.

III. METHOD

This study uses a quantitative approach method. The quantitative method is a research method based on the philosophy of positivism, used to examine certain populations or samples, data collection uses research instruments, data analysis is quantitative or statistical, with the aim of testing established hypotheses (Sugiyono, 2017)

The population used in this study are consumer goods sector companies listed on the Indonesia Stock Exchange from 2018 to 2021. The total population used in this study is 35 companies. The sample used in this study was determined by purposive sampling method, namely selection with certain criteria.

The technique used in analyzing the data in this study, namely using statistical data analysis which uses multiple linear analysis. As for the multiple linear analysis test, there are two reinforcing tests, namely the T test and R test. In addition to data analysis, there is also a classic assumption test which contains four tests, namely, normality test, multicollinearity test, heteroscedasticity test, and autocorrelation test. In this study, data processing was assisted by the SPSS version 25 program used in data analysis.

IV. RESEARCH RESULT

Multiple Linear Regression Analysis

Multiple linear regression analysis is a test involving one independent variable.The purpose of this test is to find out the direction and how much influence the independent variables have on the dependent variable. In testing this hypothesis, test hypotheses 1 to 3 where the dependent variable, namely Cash Holding, is regressed into the Growth Opportunity, Cash Flow and Capital Expenditure variables. The following results of multiple linear regression testing can be seen from the results of the table below: