AmiSight 12/13: How Much Extra Cash Do You Have on Your Balance Sheet?
I want to let you in on a bit of a secret that the government doesn't seem to understand that millions of businesses have more cash on their balance sheets today than they did at the beginning of the Pandemic. These businesses took advantage of many government programs, and their companies have recovered or performed well.
If you are in this situation, what do you do? Many people are sitting on the cash – without a plan. And that is silly. Step one is to decide how much you want to keep in reserves. And then, step two is to start thinking through how you want to invest and grow. If you can't make a good plan and are sitting on extra cash but still accruing interest because you borrowed through one of the programs, send some of it back and slow down the interest clock.
Yes, cash is king. But cash also needs a plan, especially in an inflationary environment. Use it well.