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.
