Question

• 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 (1) one additional large company that 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.

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Answer 1

Answer:

One additional large company is; "Bank of Montreal" Cash in hand: $20 Billion about 4% of its total assets

Efficient use of cash hoard using cash flow:

1) Bank can utilize this money to expand its business by opening new branches in other location and can add thousands of new customer

2) Bank can even search new corporate clients who can borrow some big amount of money

Advantages of cash hoard:

1) cash security from crisis, but only for short term

2) Indication of strong financial position

Disadvantages of cash hoard :

1) No company growth

2) Economic growth will be slow

3) Indication of inefficiency of company of company to manage its cash