This is a two part taskA discussion question and an excel worksheet.
Putting Cash to Work
Locate and post a recent news story from The Wall Street Journal or other reputable source about a publicly-traded company that has been criticized for its cash management practices.
- What were the criticisms leveled against the company? Was it accused of being too conservative and hoarding too much cash, or of taking unnecessary risks, or something else?
- How did the CFO or CEO address this criticism?
- How has the stock performance been impacted by these cash management practices?
- What are three ways, other than revenue growth, that the company could generate significant cash growth? Hint: take a look at the cash flows.
Additional Part: Complete the Worksheet to compare key performance metrics and ratios for both companies in order to see how performance can be impacted by manipulating certain financial levers.