Discuss the importance of cash on hand and how it affects the strength of the business. Would you agree that the amount of cash on hand is a factor when comparing like businesses?

Cash on hand is essential to the success and longevity of any business. To cover short-term liabilities, to fund daily operations, or to seize opportunities, having enough liquid funds is essential. Without adequate funds available, businesses run the risk of missing out on time sensitive investments or not being able to fulfill their contractual commitments – both of which can have serious repercussions.

Access to liquid capital can also give you more bargaining power when dealing with lenders and suppliers, as there is always someone who has a bigger pocket to work with. This increased flexibility could potentially result in lower costs & improved efficiency while simultaneously giving your company greater control over its future by allowing you make decisions without waiting for investors or creditors approval.

The amount of money available to compare businesses is something I do agree with. It not only shows how much cash each business has on hand, but can also show if one company is able to exert more influence over the other in negotiations because of larger reserves. This also provides an insight as to how effectively each company is managing its finances. Consistently high values could mean that they are doing a good job of budgeting and financial planning, while erratic/low figures could suggest that their management methods need improvement.

In conclusion, cash on hand is an important indicator of a company’s current & future prospects so it should absolutely be taken into consideration whenever comparing like entities.