Read Chapter 16 (Financial Management).
The fundamental purpose of a business is to generate profit for its ownership by providing a good or service. Often, businesses retain earnings or pay owners distributions, but several common problems arise in either retaining too much cash or paying owners significant sums:
A) What low risk alternatives to cash are available to businesses?
b) As business owners’ net worth is often heavily tied into their businesses, what alternative places can distributions or retained earnings be placed to diversify their assets?
Explain your reasoning.