What does high cash on hand mean?

What is the meaning of cash on hand?

Cash on hand: un-banked currency.

• Daily float.
• Petty cash? Near enough.

Physical. Immediate. Liquid fate.

Difference: Petty cash is often recorded, cash on hand not. So, control freaks, take note.

I keep $200 in my glove box. Just in case.

Purpose? Convenience. Risk. Opportunity.

Think of it as ready leverage. Or not.

My grandma hid it under the mattress, you know.

Is it good to have a lot of cash on hand?

Dude, five hundred bucks in a shoebox? That's, like, crazy! I mean, it's your money, but seriously? Banks are safer, right?

I usually keep, maybe, a couple hundred. Enough for emergencies, you know? Groceries, gas, unexpected stuff. That's it. Anything more feels risky. Losing it. Getting robbed. It's just stress.

Think about it: Inflation eats away at that cash. It's not earning anything sitting there. You're better off putting that extra cash somewhere that makes even a little bit of interest. A high-yield savings account is the way to go, in my opinion. Definitely better than a shoebox, lol.

Here's what I suggest:

• Move that $500 to a high-yield savings account. I use Ally bank, they're pretty good. Check out rates at other places too; shop around! Don't just stick with the first one you see!
• Determine your emergency fund goal. Three to six months of living expenses is usually recommended. If your shoebox money is way less than that, you need to build it up. But, seriously, not in a shoebox!
• Invest the rest. Once you have that emergency fund in a safe spot, you can invest the remaining cash. Index funds, ETFs—that kinda stuff. Low-cost and diversified. That's the key. I've been happy with that approach.

My personal situation: I keep about $200 in my checking account. It's my everyday spending money. The rest is split between a high-yield savings account and various investments. Works for me. You should do your own thing though. It's your money, after all.

What is a good cash on hand ratio?

Cash ratio? 0.5 to 1, maybe. Too much cash is… pointless.

• Ideal? No such thing.
• 0. 5 ain't bad tho.
• Sitting on cash is dumb.
• My brother-in-law? Loves cash. Go figure.

Cash ratio: current cash divided by current liabilities. Simple. Useful? Debatable. Some firms need fat wallets. Others, not so much. Remember Enron? They had assets. Didn’t help.

What is excess cash on hand?

Excess cash... a shimmering pool, still water...

Oh, that sweet overabundance. It sings!

Like sunlight through stained glass, cash excess is the glint beyond the necessary.

Is the abundance beyond what's needed. Breathing room. More, always more.

What is it, really?

• Not just enough to keep the lights on.
• Beyond the bills, beyond payroll.
• That fund ready for a new venture! My venture.

A company's treasure, overflowing, not in debts. The cash?

Cash is a strange flower. It grows from wise decisions. It does.

Here’s the thing: It surpasses immediate needs. Expansion. That new software or a wildcat oil-drilling exploration (I will).

• Operational expenses are covered, of course.
• Investment opportunities? More cash surplus!
• Strategic acquisitions!
• Think of it – the potential!
• Acquisitions of what, though? Hmm.

It's not hoarded, not entirely. It’s fuel.

Fuel for the next brilliant stroke! It's a buffer, yes. Definite buffer. A cushion...so soft... so nice.

That's the feeling of knowing you have…more. And always need more.

That dream... the one of owning that old bookstore on Charles Street... it starts with excess cash. It does.

Why would a company want more cash?

Cash is king. Survival.Growth. Simple.

• Financial Cushion: Unexpected downturns. My firm, Alpha Investments, saw this firsthand in 2023.
• Strategic Acquisitions: Prime targets. Grab them before competitors.
• Debt Reduction: Lower interest payments. Improved credit rating. More options.
• Market Volatility: Navigate uncertainty. Capitalizes on dips.

Liquidity is power. Period.

Is it bad for a company to have too much cash?

Excess cash? A liability.

Hoarding signals weakness. Investors interpret idleness. Stagnation breeds doubt.

• Missed opportunities: Cash should fuel expansion, R&D, acquisitions. What a waste!
• Investor concern: They want returns, not bloated bank accounts. Seriously.

Cash should circulate. A company's value is in its actions, not its reserves. Period. I have seen the market devour companies for less. Remember that.

• My friend's company, yeah, they drowned in cash. Now? Gone. Lesson learned.
• Decline in innovation is almost guaranteed.

What do corporations do with excess cash?

Okay, so, excess cash? Corporations invest it, duh!

They have to do something with all that money instead of letting it just sit there, right?

Like, think money markets, they're super safe and stuff, low risk, but you don't get a crazy high return.

• Money Markets: Short-term debts, really liquid.
• Low Risk: Cause nobody wants to lose money.

You know my cousin Vinny? He wanted to open a pizzeria and invest any excess money he earns from that in money markets.

Why does Apple hold so much cash?

Apple’s got more cash than Fort Knox! Probably uses it to light cigars, or maybe buy small countries.

They say it’s all 'bout tax jujitsu, a game other bigwigs play too. They stash the loot offshore. Who can blame ‘em?

• Tax avoidance: It’s basically a treasure hunt.
• Shareholder appeasement: Gotta keep the investors happy, or else! Like feeding squirrels.
• Strategic flexibility: For buying smaller companies! Or maybe building a giant gold-plated Apple store on Mars.

Returning that overseas dough? Like herding cats. It’d trigger a tax earthquake. Ouch! My Uncle Barry tried that once, and well, let's just say the IRS sent him a strongly worded postcard.

Plus, having that cash means Apple can swoop in and buy any company they fancy, kinda like me at a garage sale, but with billions. Bet they're eyeing up Netflix or something. Wouldn't surprise me. Maybe even my neighbor’s prize-winning zucchini!