Cash Holdings and Indebtedness of Publicly Traded Companies in Bulgaria during Covid-19 Pandemic
Cash Holdings and Indebtedness of Publicly Traded Companies in Bulgaria during Covid-19 Pandemic

Author(s): Galya Taseva
Subject(s): Economy, National Economy, Financial Markets, Socio-Economic Research
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: cash holdings; debt; corporate indebtedness; Covid-19 pandemic
Summary/Abstract: The aim of the study is to examine the impact of the level of indebtedness of companies in Bulgaria on their cash holdings during the crisis caused by the COVID 19 pandemic. The analysis in the article is based on data on non-financial enterprises listed on the Bulgarian Stock Exchange during the period 2019 - 2021. Multiple linear regression analysis establishes a statistically significant negative impact of leverage, measured by the ratio Total debt / Total assets, on the cash holdings of companies, measured by the ratio Cash and cash equivalents / Total assets. Companies that have more debt have lower cash holdings. Debt service costs, measured by the Interest Expenses / Interest Debt ratio, also have a negative impact on the ratio Cash and Cash Equivalents / Total Assets. High debt service costs are depleting companies' cash holdings during the pandemic.

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