|Cash is an important requirement to ensure continued operations, yet excessive
cash holdings might result in many problems which include; higher opportunity costs of holding cash, cash abuse, a tool for obtaining the controlled self-interests and the higher agency costs. The study established that there is a negative and insignificant linear relationship between growth opportunities and corporate cash holdings. The study also revealed that leverage is a significant positive determinant of corporate cash holdings in line with the precautionary motive. In regard to firm size, the study findings indicate that firm size positively determines corporate cash holding. Further, the study revealed that there is a negative linear relationship between likelihood of financial distress and cash holdings. The
findings also confirmed a positive relationship between cash flow variability and corporate cash holdings. The study therefore concludes that; leverage, firm size, likelihood of financial distress and cash flow variability determine corporate cash holdings among private manufacturing firms in Kenya.