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Abstract
This study aims at testing the relationship between inflation and the cash holdings. Moreover, the existence and the direction of the relationship between operating cycle and cash holdings have also been examined. To this aim, two hypotheses have been developed. The first hypothesis has investigated the shifting of the relationship between inflation and cash holdings of the companies at a certain level of inflation and the second hypothesis has investigated the change the direction between operating cycle and cash holdings in companies at a certain level of operational cycle. To test the hypothesis, using systematic elimination method, a sample of 77 companies, including the companies listed in Tehran Stock Exchange during 2003 to 2013 were selected and multivariate regression model was used to analyze the data. Hypotheses test results showed that the relationship between inflation and cash holdings was reverse at a certain level and from that level on, it shifted direction and this was a direct relationship. On the other hand, the relationship between operating cycle and cash holdings was reversed to a certain degree and from that level on it changed direction and this relationship became direct.