The main reason why companies want to maintain a minimum cash balance is:

Question

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Companies want to maintain a minimum cash balance to make sure there is a pool of cash available to deal with an expected need, such as paying bills or covering unexpected expenses. This helps them avoid liquidity problems and potential financial distress. While having a positive cash balance is important for the balance sheet, it is not the main reason companies maintain cash reserves. The law does not usually require minimum cash balances, and cash itself does not provide a very high rate of return compared to other investment options.

The Main Reason Why Companies Want to Maintain a Minimum