In today’s briefing:
- There Aren’t Many Companies Where Discipline Is Effectively Applied to Determine Cash Allocation
There Aren’t Many Companies Where Discipline Is Effectively Applied to Determine Cash Allocation
- When a practice that was previously adopted by few companies becomes widely adopted, the impact of that practice tends to diminish.
- Cash allocation, which is critical to the growth of corporate value, should be determined based on the company’s cash flow, cash position, and growth plans.
- At the same time, recognizing that free cash flow belongs to shareholders, any excess cash remaining after cash allocation decisions have been made should be returned to shareholders.
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