Target cash balance

Target cash balance

Optimal amount of cash for a firm to hold, considering the trade-off between the opportunity costs of holding too much cash and the trading costs of holding too little cash.
References in periodicals archive ?
GM said a foundational element of its approach will be to return all available free cash flow to shareholders while it maintains an investment-grade balance sheet underpinned by a target cash balance of $20 billion.
Maintain an Investment-Grade Balance Sheet -- GM intends to maintain an investment-grade balance sheet, including a target cash balance of $20 billion.
Not only does he need to completely forecast his income statement and balance sheet, he also needs to determine the amount of debt financing needed to reach his target cash balance.
By starting to target cash balances held by financial institutions at the BOJ instead of the previous policy of targeting short-term money market rates, the central bank in effect reinstated the zero-interest-rate policy implemented between February 1999 and August 2000.
The Policy Board decided at the meeting to target cash balances held by financial institutions at the BOJ instead of short-term money market rates, by boosting the balance of commercial bank's reserves at the BOJ to around 5 trillion yen from the current 4 trillion yen.
Amid growing deflationary fears and sagging stock prices, the BOJ decided at its March meeting to target cash balances held by commercial banks at the central bank in a major policy shift from targeting the key short-term interest rate.
In a move that signals a major policy shift, the central bank decided to target cash balances held by financial institutions at the BOJ, instead of the existing policy of targeting short-term money market rates.