Critically discuss how Debenhams could have improved its liquidity position and avoided going into administration applying this to Rolling Limited.

Description

Berkshire Hathaway held $101 billion in cash at the end of 2019 similarly Apple $269

billion in 2018 (Bary, 2020). In contrast, Debenhams were among many others going into

administration.

You are the Financial Manager of Rolling Limited, a company with 500 retail outlets

selling clothing as well as groceries with a turnover of £1.5 billion and have been asked by

senior management as to the criteria as to the level of cash to be held taking into

account of other large retailers.

Assessment Criteria

Write an essay that:

a) Discusses the reasons that Apple has large cash balances and evaluate whether a

large cash balance is an efficient use of resources as far as Rolling Limited is

concerned.

b) Critically discuss how Debenhams could have improved its liquidity position and

avoided going into administration applying this to Rolling Limited.

c) Evaluate two key cash management models in optimizing the cash position of the

company.

Reference Bary,A Berkshire Hathaway and 2 other Companies sitting on Mountains of Cash

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