Why restructuring adds value: shredding all-too-tempting cash

Article Abstract:

Excess cash in the corporate treasury is often used in mergers, acquisitions, joint ventures, or other diversification measures not in the long-term best interest of either the corporation or its investors. That cash should be reinvested in the corporation itself, through dividends to investors, who will in turn be encouraged to repatriate the money back to the corporation. Standard Oil of Ohio discovered this when it made windfall profits from an Alaskan oilfield and went on a buying spree that resulted in the CEO's firing. There are five ways to retrieve cash from willful management and return it to the shareholders' best interests: by repurchasing shares; buying back stock and financing the purchase with debt; nesting funds in an investment partnership; making a highly leveraged acquisition; or by increasing dividends.

Methods, Analysis, Mergers, acquisitions and divestments, Finance, Investments, Ford Motor Co., Corporations, Corporate finance, Cash management, Leveraged buyouts, Leverage (Finance), Leverage, Stock redemption, Dividend reinvestment, Standard Oil Company of Ohio

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Statewide Banking Eases In-State Cash Concentration

Article Abstract:

Statewide bank accounts are a new service being offered which permits companies that use several branches of a bank to consolidate their accounts. This service reduces bank service charges. The concentration account is cost effective, but is not gaining acceptance very rapidly.

Banking industry, Services

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