Consider the following: in the aftermath of the 2007/2008 global financial crisis many companies accumulated significant cash balances. Government officials, in an effort to boost economic activity, often chastised companies for this. For example, then Governor of the Bank of Canada, Mark Carney, publicly suggested that if the companies were not using the money, they should give it back to shareholders. In finance, if a company holds a large cash balance it implies the company’s shareholders have a lot of trust in their management. Why is that?

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Reasons Why Cash Is King for Businesses Individuals Cash is king is an ageold saying often wont to explain the failure of both businesses and consumer households Without the correct amount of money th... View the full answer