NEW YORK - "Certain companies strive to have a lot of cash because they want a cushion, particularly in a downturn," says April Klein, associate professor of accounting at New York University's Stern School of Business.
For some companies, that cushion may also mean a competitive advantage. Take, for example, Technitrol (nyse: TNL - news - people), a Philadelphia-based manufacturer of electronic components for use in networking and Internet applications. As of its latest reported quarter, the company held $163 million in cash and equivalents, 50% of its shareholders' equity.
All that cash could serve Technitrol well, according to David D. Weaver, analyst at Legg Mason Wood Walker. "The company has said it's looking for acquisitions," Weaver notes, "so it's nice they have that firepower available, without having to go to the debt or equity markets."
Full story at Forbes.com