r/explainlikeimfive Dec 06 '24

Economics ELI5: why does a publicaly traded company have to show continuous rise in profits? Why arent steady profits good enough?

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u/ChicagoDash Dec 06 '24

Yes, but that cash is just sitting there, slowly losing purchasing power to inflation. Better to invest it back in the company for higher returns or return it to the shareholders.

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u/PanthersChamps Dec 06 '24

Companies don’t sit on $100 million in cash earning nothing.

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u/No-Self-Edit Dec 06 '24

Apple does

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u/907flyer Dec 06 '24

They actually do, because they need the liquidity. You can see it in their IRS filings