Cyclical companies often like to retain extra cash/marketable securities during the "good" times in order to ensure that they have sufficient liquidity when the inevitable downturn in the business cycle arrives.

Question

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This statement is true, as cyclical companies tend to have business operations that are strongly tied to the economic cycle, and as such they are more vulnerable to downturns than non-cyclical companies. Retaining extra cash and marketable securities during good times can help them weather periods of economic weakness and ensure they have the liquidity needed to continue operations.

Cyclical Companies Often Like to Retain Extra Cash/marketable Securities During