Investing in Cash Supported Companies | PowerOptions Web Log
In turbulent times like these, it is important to make sure that the companies you are investing in are financially stable. One way to determine this is by looking at the company’s balance sheet and comparing the amount of debt they have with the amount of cash they have. If a company has a lot of cash and little debt, they will have more opportunities and provide more stability to shareholders than less fortunate companies who have little cash and a lot of debt. Takeover Target One such advantage more liquid companies have is that they are more attractive takeover targets. When large companies look for smaller companies to buy, they look at the ones who have little debt and a lot of cash. This is because the larger company does not want to incur a lot of debt because chances are they already have enough of their own. What...
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