New York, US (PRWEB) June 14, 2013
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Recent reports indicate that many American companies are sitting on record amounts of cash due to high profits. What is surprising is the level of cash that these companies hold following years of economic crisis. The economic downturn, however, has not stopped many companies from earning record profits, with the S&P 500 racking up profits in 2012 that have never been seen before in history.
Companies have been utilizing this money in many different ways. Some are increasing dividends and buying back shares. This is method does little to grow the core business of the company and is considered to be lazy tactic. Another strategy employed be cash-rich companies is to poach employees from rival businesses or to use the money to invest in new equipment or in a smaller business - with the operations being absorbed into the larger corporation. This is considered a safer manageable option which would most likely to prove beneficial in the long term.
The smartest tactic a cash-rich company could adopt would be to pursue the option of spending their cash wisely by investing in their business to promote growth which has the potential to contribute to the national economy and stimulate job development. However, even though many companies can afford to, they are very wary about making poor acquisition decisions and not wanting to overpay for companies they do wish to take on.
This article explores the current spending trends of these cash-rich corporations, the options available to them and how these businesses can use the money to invest and grow their business. With cash reserves at record highs, it seems many businesses in corporate America certainly have the cash to spend – but are choosing not to.
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