If a company has several subsidiaries in a single country it is very efficient to use cash surpluses from one to fund cash deficits of another.

Question

Quizplus · Accepted Answer

By using cash surpluses from one subsidiary to fund cash deficits of another subsidiary in the same country, the company can avoid the need for external financing or borrowing and minimize transaction costs. This can lead to a more efficient use of cash within the company.

If a Company Has Several Subsidiaries in a Single Country