What We’re Reading Series: We always recommend reading the news, but it can be boring or hard to understand (for us too). So at the beginning of each week, we’re sharing what we’re reading in the finance world and what it means!
These next few weeks, we’ll be talking about all the things companies do that are similar to us normal people! Like taking on too much on debt, hoarding an emergency fund, and cost cutting.
Financial Times: Top Rated Companies Raise $1tn in 5 Months to Fill ‘War Chests’
Companies manage their money similar to people. Right now, CEOs are trying to avoid becoming the broke friend with a bad credit score and no rich uncle.
Companies are focused on cash (liquidity) instead of typical sales. In times of uncertainty, investors are less willing to loan money and companies with high debt are at risk of bankruptcy if they can’t find cash for their interest payments.