[ghaff]

"Cash" in balance sheet accounting-speak isn't limited to the dollar bills under Tim Cook's mattress. It refers to a large number of essentially "cash equivalent" things that can be converted to cash quickly and easily, albeit at essentially risk-free rates of return.

You maintain a cash reserve so that, if there is a (hopefully) short-term market correction, you're not stuck with having to sell assets in a dip to meet payroll, etc. Not really much different from people in that regard although obviously at a different scale.

[qeternity]

Apple owns a hedge fund (the largest in the world) to do just this.

Braeburn Capital.

[malshe]

> the dollar bills under Tim Cook's mattress That gave me a chuckle just imagining it :)

[ufhghfggf]

Drug lord Pablo Escobar once burned $2 million cash to keep his family warm while they were hiding in a cave. It is also said he lost 1 billion cash per year due to rats eating the bills and/or dampness spoiling them.

References:

https://www.businessinsider.com/pablo-escobar-burned-2-milli...

http://www.hoaxorfact.com/celebrities/drug-lord-pablo-escoba...

[dylan604]

I'd imagine more like Scrooge McDuck in swim trunks diving into a large vault of gold coins.

Also, I doubt there's really a matress. He just sleeps on the money directly. Stacks of banded bills is probably pretty stiff vs just loose bills all piles up organically. Like each night before bed, he takes a few new stacks of cash reserves and makes it rain before diving in.

[rllearneratwork]

"risk-free rates of return" - typically means "losing value via inflation"

[snowwrestler]

No it means keeping up with inflation but not substantially beating it.

[1123581321]

The other user is right. In a low interest rate environment it’s well possible for risk-free to underperform inflation. You can see this in the current short-term US treasury rates. This is one of the reasons so much money is piling into riskier assets.

[snowwrestler]

I assure you that major corporations understand this and pursue an investing strategy to at least keep up with inflation.