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> For starters, that's 3 months of at least revenues Why would they need to hold 3 months of revenue? Why not 3 months of operating expenses and suspend capex?
by DarmokJalad1701 7y ago
> For starters, that's 3 months of at least revenues
Why would they need to hold 3 months of revenue? Why not 3 months of operating expenses and suspend capex?
> more R&D, more equipment, more and better-paid staff, improvement programs, to buy promising technologies, invest in other companies, pay down loans on larger, more modern and more-efficient factories ... the list goes on and on
Does that list include stock buybacks?
- djannzjkzxn 7y agoIt depends on the prospects of the company and how good investment opportunity are. For a company in a fast-growing market it’s probably better to invest and expand the empire. For a more mature company it’s probably better to return the cash to shareholders so they can invest somewhere else.
- jacques_chester 7y ago> Does that list include stock buybacks? The omission is deliberate. When money is being returned to shareholders I greatly prefer dividends. It puts pressure on management to manage for sustainable long-term cashflow and removes the temptation to pump up the stock for a quick personal profit. Unfortunately the tax treatment in the US is very unfavourable. By contrast, Australia gives franking credits for dividends and more companies there pay shareholders with dividends instead.