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In: Accounting

Prior to the financial recession in the late 2000s, some companies had built up significant cash...

Prior to the financial recession in the late 2000s, some companies had built up significant cash balances. By 2010, discussions began about whether “cash hoarding” by firms was an appropriate activity or if it was hurting the economic recovery. Research this issue and answer the following questions:

  • What are the advantages of having a large cash balance? Please describe and provide examples.
  • What are the disadvantages of having a large cash balance? Please describe and provide examples.
  • Research a publicly traded company that holds a sizable amounts of cash and liquid investments on their balance sheets. Describe the company, the balance and how that balance has varied over the past three years.

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