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Comment by smorrebrod | Hacker News Reader

This sounds to me like an gigantic amount of money. I looked it up and apparently it was $136B in 2019¹ and $111B today². And Microsoft, although it is the company with the most cash on hand, is not an outlier here with Alphabet at $121B and Apple at $100B².

I really don't know why they do this though.

[1] https://www.cnbc.com/2019/11/07/microsoft-apple-and-alphabet...

[2] https://www.macrotrends.net/stocks/charts/MSFT/microsoft/cas...

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> I really don't know why they do this though.

Because you're looking at absolute numbers and not percentages/relative values. That much cash on hand sounds absurd when you're only looking at the absolute number of it, but the amount it represents is "just" 6 months of revenue. And any good financial advisor will tell you it's a good idea to keep 6 months of earnings as savings.

A good financial advisor will recommend keeping 3-6 months of non-negotiable expenses saved, not revenue. 6 months of revenue would be a quite significant amount of savings for most people.

It is mostly about taxation. Companies get taxed where the money is made/moved. A lot of the money in big company balance sheets is in Europe where they have lower corporate tax rates. If they moved that money back to the US, they would have to pay more tax on it. However, they have less need for the money outside the US, so the money just piles up.

Note, this is a very simplistic explanation of complex global accounting regulations (eg the money is likely "physically" in New York even though it is "legally" in Europe)

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