INFLUENCE OF CASH HOLDINGS AND CAPITAL STRUCTURE ON FINANCIALPERFORMANCE IN INSURANCE LISTED COMPANIES

Abstract

This study aims to assess the impact of cash holdings and capital structure on the financial performance of listed insurance companies on the Vietnamese stock exchange. Financial performance is measured by the return on assets (ROA). Cash holdings are measured by cash and cash equivalents divided by total assets. Capital structure is measured by the debt-to-equity ratio. The study utilizes financial report data from 13 listed insurance companies from 2018 to 2022, comprising 65 observations, employing OLS regression method and addressing multicollinearity using FGLS model. The results indicate a positive linear effect between the cash holdings ratio and the return on assets, while the capital structure does not influence financial performance. Based on the research findings, the authors also provide recommendations to optimize financial performance and propose solutions for selecting the optimal capital structure and cash holdings of listed insurance companies.