U.S. Companies Are Piling Up Cash. Is That A Problem?

For some companies, it's `an enormous temptation to waste'

What a windfall. On Jan. 27, General Motors disclosed that it ended 1996 with cash reserves of $17 billion--$2 billion more than analysts had expected and some $4 billion more than the company says it needs as a cushion against future economic downturns. GM attributed the late-year cash surge to a well-timed tax refund and better management of inventory and receivables. Result: what GM Chief Financial Officer J. Michael Losh calls "an absolute powerhouse cash position."

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