Good article on “hoards” of cash in businesses who “battened down the hatches” in survival mode. In my opinion, I agree the recovery and economy will continue to suffer until this cash flow is released back into the business commerce flow. Small business and leadership……cash management
Excerpt………To enhance financial flexibility, companies have been retaining unprecedented amounts of cash on their balance sheets, calling it “strategic” cash to distinguish it from the “operating” cash that is needed to run the business.
Politicians have claimed that retaining cash balances is hurting the global economy—even characterizing the practice as unpatriotic—and many investors have argued that excess cash rightfully should be returned to shareholders through dividend payments or share repurchases.
This raises the question of whether retaining strategic cash makes economic sense and should be viewed as a legitimate corporate finance tool in today’s environment.
Read full article…….via Should Companies Retain “Strategic” Cash? – Bruce Nolop – Harvard Business Review.
