Marking time: The problem of excess cash
Evaluating options for cash deployment
In this economy, excess cash isn’t always a bad problem to have. However, keeping it on the books isn’t always the answer for a company’s long-term health.
Do shareholders care about excess cash?
When excess cash sits on the balance sheet, it’s not being utilized for initiatives that further innovation or growth. While cash distribution may temporarily satisfy impatient shareholders, returning cash won’t be enough to meet long-term expectations for growth sectors such as technology and life sciences. Companies that apply a comprehensive approach to cash deployment and focus on long-term value creation will be more likely to satisfy both the market–and their shareholders.