If you are a CFO, part of your job obligations will likely include handling excess funds....

If you are a CFO, part of your job obligations will likely include handling excess funds. This is cash on hand that doesn’t need to be spent in the near future. What should you do with these funds? Invest it? Leave it in the bank? What are some key considerations?

What are your thoughts on this from a Christian perspective?

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Expert Solution

Excess funds are the funds that are not required in near future in the business. To decide whether to invest or to leave the funds in bank will depend on various factors. Some key considerations for deciding are:

1. Duration for which funds are idle need to be taken into consideration. If it for long duration then invest them else keep them in bank.

2. Return on investment need to be taken into consideration. If investing funds provides higher returns than keeping them in bank, then invest them, otherwise keep them in bank.

3. Liquidity of funds need to be taken into consideration. If cash can be required at anytime then keep funds in bank otherwise invest them.

4. Market condition need to be taken into consideration. If there is recession then it is better to keep funds in bank otherwise it can lead to erosion of even principal investment.

From christian prospective also the above strategy should be same. As these are factors that any prudent CFO would take into consideration before investing funds.

ekkarill92 answered 1 year ago

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