Cash Hoard

DEFINITION of 'Cash Hoard'

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."

BREAKING DOWN 'Cash Hoard'

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.

RELATED TERMS
  1. Hoarding

    The purchase of large quantities of a commodity with the intent ...
  2. Net Cash

    A company's total cash minus total liabilities when discussing ...
  3. Cash Position

    The amount of cash that a company, investment fund or bank has ...
  4. Cash Ratio

    The ratio of a company's total cash and cash equivalents to its ...
  5. Trading Below Cash

    When a company's total share value is less than its cash minus ...
  6. Initial Cash Flow

    The amount of money paid out or received at the start of a project ...
Related Articles
  1. Markets

    Cash: Can A Company Have Too Much?

    Cash is something companies love to have. But if they are not using it there could be problems.
  2. Insights

    These 5 Companies Hold Over $500 Billion in Cash

    And they hold much of it overseas, to boot.
  3. Markets

    Negative Interest Rates: 4 Unintended Consequences

    If negative interest rates do, in fact, persist and become commonplace for both firms and individuals alike, there are a number of unintended consequences that might follow.
  4. Investing

    Overseas Cash Hoards: Shareholder Boon Or Taxpayer Burden?

    American corporations are holding something in the neighborhood of $1.5 trillion in cash in the coffers of their offshore entities, usually to avoid tax liability. Needless to say, not everyone ...
  5. Investing

    Cash Report: Information Technology Still Hoarding Greenbacks (AAPL, MSFT)

    Read several theories about why the technology sector is stockpiling unprecedented amounts of cash reserves, rather than reinvesting or paying dividends.
  6. Markets

    What is the Cash Ratio?

    The cash ratio is the ratio of a company's total cash and cash equivalents to its current liabilities.
  7. Investing

    Calculating Net Cash

    A company’s net cash is its total cash remaining after it subtracts all liabilities.
  8. Retirement

    The Essentials Of Corporate Cash Flow

    Tune out the accounting noise and see whether a company is generating the stuff it needs to sustain itself.
  9. Investing

    Cash Flow From Investing

    Cash flow analysis is a critical process for both companies and investors. Find out what you need to know about it.
  10. Investing

    Why Cash Management Is Key To Business Success

    Businesses need to generate a healthy cash flow to survive, but not hold too much so that inventory suffers or investment opportunities are missed.
RELATED FAQS
  1. What does the cash ratio of a company measure, and how does it affect decision making?

    Learn what the cash ratio of a company measures, and understand why its an important liquidity ratio for a company to use ... Read Answer >>
  2. How can you use a cash flow statement to make a budget?

    Understand how a cash flow statement can be used to create a company budget. Learn the difference between a cash budget and ... Read Answer >>
  3. What is the relationship between the cash ratio and liquidity?

    Understand the relationship between a company's cash ratio and its liquidity. Learn what the cash ratio measures and what ... Read Answer >>
  4. Why would you take DCF into account rather than simply projecting future revenues?

    Learn what discounted cash flow analysis is and why it is considered a better equity valuation tool than simply projecting ... Read Answer >>
  5. Where do companies keep their cash?

    If you have ever looked over a company's balance sheet, you have no doubt noticed the first account under the current asset ... Read Answer >>
  6. What is the difference between cash flow and revenue?

    Understand the difference between cash flow and revenue as they relate to corporate accounting and the financial evaluation ... Read Answer >>
Hot Definitions
  1. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  2. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  3. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  4. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  5. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  6. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
Trading Center