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15-06-2013, 10:05 PM
no, we are not talking of a company hording cash per se.
cos most companies have some level of cash anyway. the ones which has nil cash, i think it shd raise red flags++ and we should question ourselves why are we looking into this company in the first place.
rather, a company which has increased its cash level by a significant level via disposal of some assets or injection of new biz etc. so this extra cash over that already present cash level...shouldn't the company think of returning some (of course, we don't expect all) to the shareholders?
(not forgettting that debt part is also impt to know the overall cash position)
If it doesn't, I think it is only fair that it comes up with an explanation for not doing so. Shareholders which can accept will continue to stay on, those cannot accept might just sell off their shares.
cos most companies have some level of cash anyway. the ones which has nil cash, i think it shd raise red flags++ and we should question ourselves why are we looking into this company in the first place.
rather, a company which has increased its cash level by a significant level via disposal of some assets or injection of new biz etc. so this extra cash over that already present cash level...shouldn't the company think of returning some (of course, we don't expect all) to the shareholders?
(not forgettting that debt part is also impt to know the overall cash position)
If it doesn't, I think it is only fair that it comes up with an explanation for not doing so. Shareholders which can accept will continue to stay on, those cannot accept might just sell off their shares.