Quote:
Originally posted by Hank Chinaski
a broke bank doesn't mena it's CDs are toast too? by the way, this is my question, and it has to do with liquid cash for a company.
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It's no different: CDs/cash. Instead of instructing bob to buy CDs tell him to get a depository account.
But why should a firm find itself in this position? If it pays bonuses on a given date it should buy treasury bills or other high-quality short-term bonds that mature on or about those dates. To the extent the bonuses are funded by current revenues, it could purchase those bonds on a cash/ongoing basis as needed (i.e., each time the account balance reaches $100k, purchase a tbill maturing in mid-December.).
