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Definition

<p style="text-align: justify;">A <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">balance sheet</span> <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">asset</span> which appears among the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">current asset</span>s as "Cash and Bank Balances" . Cash is part of the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">company</span>'s <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">working capital</span> because the company must always have some <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">cash</span> to meet current <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">expenses</span> such as paying creditors and salaries. Many companies operate with an <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">overdraft</span> so that any cash that they receive immediately reduces their overdraft balance and hence the amount of <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">interest</span> they are paying. Cash-rich companies can, however, be accused of having a <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">lazy balance sheet</span> where the cash which they hold is not being used to grow the company either <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">organically</span> or through <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">acquisition</span>. In such circumstances the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">directors</span> will be under pressure to return the surplus cash to <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">shareholders</span> in the form of a special <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">dividend</span>.</p>