Financial Accounting Blog

Tuesday, June 15, 2004

What should Microsoft do with its $56bil nest egg? The Economist reports that Microsoft is sitting on $56 billion in short term investments and cash equivalents. While Bill Gates wants to sit on enough money to make up for a year with no income, there is still $28 billion left. So what should Microsoft do with its retained earnings? Some say to re-invest the money; buy a company like SAP and expand into service contracts with large corporations. The analysts warn against that, it would alienate other businesses it works with. Instead they suggest a dividend payment.