PDSnet Glossary

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Definition

A policy of keeping the cash which a business has in the company rather than paying it out in the form of dividends or using it for capital projects. Companies usually adopt a capital preservation policy when they are uncertain about the future (such as during the COVID-19 pandemic) or when they feel that the company's debt level is excessive. Part of a capital preservation policy is usually the paying down of debt and de-leveraging the balance sheet.

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