Most often, when news breaks about a firms cash position, its because the firm is running low,
Question:
Most often, when news breaks about a firm’s cash position, it’s because the firm is running low, but that wasn’t the case for Ford, Chrysler, and General Motors at the end of 1997. At that time, Ford held $20.8 billion in cash and marketable securities, GM had $14.5 billion, and Chrysler had $7.1 billion. Similarly, by the end of 1998, Nissan, the Japanese auto manufacturer, had piled up about 400 billion yen, which amounted to several billion dollars. Thus, each company had substantial cash reserves; in fact, particularly in Ford’s case, enormous might be more descriptive. Why would firms such as these hold such large quantities of cash?
Step by Step Answer:
Fundamentals Of Corporate Finance
ISBN: 9780072553079
6th Edition
Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan