Other things held constant, if a firm holds cash in excess of their optimal level in a non-interest bearing account, this will tend to lower the firm's

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Excess cash held in a non-interest-bearing account is not earning any returns and is not being used to generate profits. Thus, it reduces the return on equity, which is a measure of profitability, and total asset turnover, which is a measure of asset utilization. However, profit margin, which is a measure of a firm's operating efficiency, is not directly affected by the excess cash.

Other Things Held Constant, If a Firm Holds Cash in Excess