Cash Hoard

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DEFINITION

A large amount of available money held by a company in anticipation of facilitating future projects or meeting future financial obligations. A cash hoard held by a company often makes the company attractive as a target of acquisition because of its sound financial situation.


Also referred to as a "cash reserve."



INVESTOPEDIA EXPLAINS

Analysts make frequent speculations regarding the purpose of the firms' surprisingly large cash hoards. Some economists argue that government measures to reduce interest rates and encourage borrowing and spending have, instead, led corporations to hoard more cash, rather than investing the money in expansions that would lead to new jobs. When the economy falters, companies may choose to increase their cash-to-assets ratio to avoid loans and debts, and to limit risks.


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