1. 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.
2. Suggest at least two (2) advantages and two (2) disadvantages of companies accumulating cash hoards. Provide a rationale for your suggestion.
Solution
Advantages of cash Hoardings are:-
1. cash Hoarding by a company reflects the company with strong business performance.
2. It can be used as a buffer against bad times or mistimed acquisitions.
3. cash Hoardings is a business facilitator.
4. Flexibility for future growth.
Disadvantages of Cash Hoarding are:
1. Cash Hoarding is a Dearth of attractive investment opportunities.
2. There is lack of long term planning.
3. Cash Hoarding leads to agency costs.
4. Possibility of incurring suspicion and indignation from the shareholders.
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1- Apple Inc- and Microsoft Corp- are identified as companies that hav.docx
1. 1. 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.
2. Suggest at least two (2) advantages and two (2) disadvantages of companies accumulating
cash hoards. Provide a rationale for your suggestion.
Solution
Advantages of cash Hoardings are:-
1. cash Hoarding by a company reflects the company with strong business performance.
2. It can be used as a buffer against bad times or mistimed acquisitions.
3. cash Hoardings is a business facilitator.
4. Flexibility for future growth.
Disadvantages of Cash Hoarding are:
1. Cash Hoarding is a Dearth of attractive investment opportunities.
2. There is lack of long term planning.
3. Cash Hoarding leads to agency costs.
4. Possibility of incurring suspicion and indignation from the shareholders.
