Canadian Center of Science and Education
Adequate cash levels are fundamental towards smooth operations of firms. Managers have a tendency to hold a significant share of firms' assets as liquid assets in order to reinvest on other physical assets, payments to stockholders and to keep cash inside the firm. Cash levels are influenced by firms? capital structure, cash flow, investments and asset management policies as well as by theirs working capital requirements, and dividend payments. This paper focuses on analyzing the drivers of cash holdings of non-financial Portuguese manufacturing Small and Medium sized Enterprises (SMEs), for the period 2001 to 2007.