CBHC Financial Advice

13/12/2017

According to analysis compiled for the Times, the profitability of large
British companies has more than halved in the past six years because
executives are inefficiently hoarding cash and shunning borrowing.
Return on equity fell from 17.9% in 2008 to 12.9% last year and to 8.7%
this year. Companies are running hugely inefficient balance sheets, with
too much cash and not enough debt, according to the retail stockbroker
The Share Centre, which conducted the analysis. This seems to apply to
SME’s too and with a fragile recovery under way, people are
understandably wary of borrowing more in case matters take a turn for
the worse again. It should be considered however that sitting on cash in
a company can be a waste if there is good quality new business out
there or potential acquisitions that may be a good deal cheaper now than
they were say 5 years ago. Speak to us if you would like to explore
your options more and want to consider borrowing conservatively or
making cash balances work a good deal harder.

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