Question

"Cash Flow Statements and Cash Hoards" Please respond to the following: Apple Inc. and Microsoft Corp. are identified as companies that have accumulated substantial sums of cash. Microsoft and Apple increased dividend payouts and acquired treasury stock to return some of the excess cash to shareholders. Use the Internet and/or Strayer Learning Resource Center to identify one (1) additional large company which is currently accumulating a cash hoard. Next, evaluate how the company identified in your research can use the cash flow statement to project efficient uses of the cash hoard it has accumulated. Suggest at least two (2) advantages and two (2) disadvantages of companies accumulating cash hoards. Provide a rationale for your suggestion.

Answer 1

following is the company which is currently accumulating a cash hoard
FORBES is the company which is currently accumulate the cash hoard. now i will evaluate its cash flow statement to projet efficient use of cash hoard it has accumulated are given below
Cash flow is the net movement of money for a given entity. Annual cash flow of the typical household is all the family’s income minus all the family’s expenses.

If the net flow is negative, the household ran a deficit for the year. One year of deficit means many years of debt. With interest payments, it frequently leads to financial defeat.

If net flow is positive, the household ran a surplus. One year of surplus means many years of investable savings that, with market growth, frequently leads to financial success.

advantages are given below
Reflective of a company with strong business performance

One of the advantages is that a large cash hoard signals that the company seems to accumulate cash faster than it can deploy

Buffer against bad times

Cash can be used as a buffer against bad times or mistimed acquisitions.

Disadvantages

Dearth of attractive investment opportunities

One of the most obvious reasons for a large cash hoard is that management has exhausted attractive investment opportunities at the moment and is keeping cash for future opportunities whenever that may be

Lack of long term planning

Some companies may not have the practice of planning for the long term.