Cash plays an important role in the survival and survival of a business unit. Firms that do not have sufficient cash for possible future investments will not incur transaction costs associated with converting assets into cash or financing from outside the company and will be able to respond quickly to market changes. So companies use more cash flow to stay competitive. On the other hand, in conditions of recession, the entity prefers to save its cash to maintain its level of competitiveness in order to achieve its goals or maintain its cash balance to withstand the negative shocks of foreign capital markets. But due to the lack of appropriate scientific and empirical evidence, the present study investigates the relationship between product market competition and firm cash holding with emphasis on business cycle adjustment. In this regard, a sample of 130 listed companies was selected and tested during the period 2012-2017. The results using multivariate regression method show that competition in the product market leads to an increase in the level of cash holding and the second hypothesis results show that the business cycle has a moderating effect on the relationship between competition in the product market and an increase in the level of cash holding. No criticism