The hottest Cash Management Substack posts right now

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Data Update 7 for 2023: Dividends, Buybacks and Cash flows

Musings on Markets • 359 implied HN points • 08 Mar 23
💰 Finance Corporate Finance Investment Strategies Cash Management Dividend Policy Market Trends
  1. Buybacks are becoming more common than dividends for companies to return cash to shareholders. Companies find buybacks more flexible and less of a commitment than regular dividend payments.
  2. Dividends should be one of the last steps in a company's financial decisions. If a company has no good investments, it should consider paying dividends or buybacks as a way to return cash to owners.
  3. There are tax differences between dividends and buybacks that may influence shareholder preferences. Although dividends used to be taxed more heavily, the gap has narrowed in recent years.

KPI & Cash Control

Venture Prose • 0 implied HN points • 02 Jan 17
💼 Business Startups Cash Management Funding Management
  1. Startups can crash due to internal clashes or running out of cash. Make sure to master your KPIs to avoid the latter.
  2. Key Performance Indicators (KPIs) act as a control tower, providing insight into the business status and potential problems.
  3. Tracking and mastering KPIs is crucial for building a proper profit & loss and cash plan to ensure business sustainability.

January 2018 Data Update 9: Dividends, Stock Buybacks and Cash Holdings

Musings on Markets • 0 implied HN points • 04 Feb 18
💰 Finance Investing Dividends Corporate Finance Stock Buybacks Cash Management
  1. Dividends and cash returns are important for businesses, but many believe they signify failure instead of success. It's better for companies to return cash to shareholders rather than forcing it into poor investments.
  2. In reality, capital markets aren't always accessible, making it risky for companies to pay large dividends. If they overcommit to dividends, they could miss out on great investment opportunities.
  3. Many companies pay dividends out of habit, even when it may not be wise. This can lead to inefficiencies where they prioritize dividends over solid investment strategies.

Apple: The Greatest Cash Machine in History?

Musings on Markets • 0 implied HN points • 09 Feb 17
💼 Business Corporate Finance Valuation Investing Market Analysis Cash Management
  1. Apple has built a huge cash reserve, nearly $250 billion, mostly because it earns more than it distributes to shareholders. This makes it one of the best cash-generating companies ever.
  2. Despite giving back a lot of cash to its investors through dividends and buybacks, Apple's cash balance keeps growing. This shows how strong its business is, even during tougher market conditions.
  3. Investors should adjust their expectations for Apple because it may not come up with big new products as it did in the past. It is now a massive company facing more competition, which can lead to mood swings in its stock price.
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The Value and Pricing of Cash: Why low interest rates & large cash balances skew PE ratios

Musings on Markets • 0 implied HN points • 27 May 15
💰 Finance Valuation Investing Market Analysis Cash Management Corporate Finance
  1. Cash is often misunderstood in company valuations. It should be simply valued without complex models, but many investors mishandle it.
  2. Low interest rates and high cash balances impact price-to-earnings (PE) ratios. When cash makes up a large part of a company's value, it can distort their financial ratios.
  3. We need to separate cash from operational value when evaluating companies. This helps create a clearer picture of their actual performance and worth.