DO BUSINESSES INVEST THEIR MONEY LIKE INDIVIDUALS?

I was celebration of the mass the book upon financial management as good as this subject strike me. Do businesses deposit the apportionment of their increase in to things similar to holds as good as holds (besides their own) or is there the little arrange of order opposite that? It seems to me which the association with the gifted financial devision could unequivocally do good if they invested partial of their profits.

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{ 3 comments }

madmoney July 21, 2011 at 5:51 am

It depends on the business. Banks invest heavily, as do Insurance companies and a lot of non profits.
iF the business generate a lot of extra cash flow they will invest it to make income.

Chris C July 21, 2011 at 5:58 am

Yes, many businesses do invest a portion of their profits. It’s just a way of making their emergency funds/capital work while their sitting there. You will often see large corporations invest in tax shelter type investments like Whole Life insurance policies, or other high end products like that.

R B July 21, 2011 at 6:16 am

Yes most companies invest some of their profits. There are no rules against it. I am not sure there would be any advantage investing company funds even with a “talented” finance division. Lets face it the banks etc. were investing in those CDO’s when all heck broke loose. Many of those talented investors lost millions. To me a guy investing his own hard earned money will beat the talented guys playing with other peoples money. Wasn’t Bernie made off. supposed to be talented.

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