[skannamalai]

This is true in theory. But in practice that revenue/profit often is allocated inefficiently anyway in the form of excessive exec compensation and stock buyback programs when valuations are high. Such as when your stock is trading at a high multiple. So the company is trading cash (which has a book value) for stock (which also has a book value but is probably overvalued) which juices the stock price in the short term. But stock assets vs cash are far more volatile to shock and thus provides less operating flexibility for big companies.

Imagine if you had that substantial cash reserve. This would be an opportune time to buy back shares on the open market after taking care of operating expenses.

One reason cash reserves don't often exist is "activist" investors and private equity who calculate (book value - market cap) as their potential upside from buying undervalued shares and stripping the cash assets before dumping the remains.

Anyway it's an complicated mix. I'd like there to be more emphasis on sustainable valuation growth from some adminstration and the SEC, but I don't know enough to suggest solutions to improve governance.