Why do firms hold cash?

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Why do firms hold cash?

2007-08-30 02:56:50 · 2 answers · asked by bertz 1 in Business & Finance ➔ Other - Business & Finance

2 answers

To pay bills, to pay employees, to pay whatever. Remember "cash" doesn't necessarily mean "cash". It could be a bank account, money market account, checking account. Companies get lots of money in one day, and then spend lots of money the next day. Cash is what they have at a given time.

2007-08-30 03:17:00 · answer #1 · answered by Anonymous · 0⤊ 0⤋

They need to have a certain amount of cash on hand to pay their bills and conduct business.

Some businesses (Microsoft would be an example) have much cash on hand because they haven't found anything they want to buy with the extra yet.

2007-08-30 03:01:39 · answer #2 · answered by Judy 7 · 0⤊ 0⤋