The fundamental reason for the outbreak of commercial bill issues in the business world this time was still because, in previous years, many seemingly huge and impressive mega-corporations suddenly collapsed.
Although there had been various rumors about these companies being in debt, everyone felt that such large enterprises having debt was normal—as long as the company could still operate normally, there was no problem.
When the news broke, everyone realized that this was not just about insolvency but that the assets were not even enough to cover the interest on the debt.
So now everyone holds the view that cash is king.
Even a company like Rice, which is operating quite well, would sell shares at high prices to accumulate a large amount of cash to prevent unexpected situations in the future.
It also reassures investors and partners.
No matter how eloquently you speak, nothing reassures others more than having millions of cash lying in the account.
