The only instruction for this homework is that you reply to this post.
The only instruction for this homework is that you reply to this post. This response post has to be 100 words.
In order to control cash, the management and leadership of a company puts policies and procedures into place on numerous levels; these policies and procedures often include ensuring proper authorizations, segregating duties, seeking independent verification, safeguarding assets and records, independent reviews and appraisals, and designing and employing business documents (Porter & Norton, 2018). For the Walt Disney Company, the cash balance at the end of 2018 was $4,155 million and was $5,455 million (The Walt Disney Company, 2020). Indeed, it is just as possible for a company to have too much cash as it is for them to have too little. If a company has too much cash on hand, investors may wonder why that asset is not being put to work in investment opportunities and if there is too little, investors may worry that the company might be carrying too hefty of liabilities which they are less likely to be able to pay off (McClure, 2020). However, in the case of Disney, it seems as if they have done an adequate job in putting their money to work, as the company likely was able to undertake the successful acquisition of Twentieth Century Fox in 2019 due in part to their 2018 cash balance. Furthermore, despite that large undertaking, the company was still able to keep a steady balance of cash on their books which is an increase from the previous year before the acquisition, but not something which would be worrisome, given the context of the 2019 financial year.
References
The Walt Disney Company (2020). 2019 Annual Report. Retrieved from https://thewaltdisneycompany.com/app/uploads/2020/01/2019-Annual-Report.pdf (Links to an external site.)
McClure, B. (2020, February 8). Can a Company Have too Much Cash? Investopedia. Retrieved from https://www.investopedia.com/articles/fundamental/03/062503.asp (Links to an external site.)
Porter, G., & Norton, C. (2018). Using financial accounting information: The alternative to debits and credits (10th ed.). Retrieved from https://www.cengage.com
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