War chest
Encyclopedia
In arms and armor, a war chest is a container
Chest (furniture)
A chest is one of the oldest forms of furniture. It is typically a rectangular structure with four walls and a liftable lid, for storage. The interior space may be subdivided...

 for the personal weapon
Personal weapon
A personal weapon or ordnance weapon is a weapon that is issued to an individualmember of a military or paramilitary unit, e.g. to individual infantry soldiers, but also side arms carried by officers or other personnel....

s and protective gear
Personal armor
Personal armor is the whole of protecting clothing, designed to absorb and/or deflect slashing, bludgeoning, and penetrating attacks. They were historically used to protect soldiers, whereas today, they are also used to protect police forces, private citizens and private security guards or...

 of a citizen-soldier
Militia
The term militia is commonly used today to refer to a military force composed of ordinary citizens to provide defense, emergency law enforcement, or paramilitary service, in times of emergency without being paid a regular salary or committed to a fixed term of service. It is a polyseme with...

, kept in the household, and is the origin of the term.

In politics

In politics
Politics
Politics is a process by which groups of people make collective decisions. The term is generally applied to the art or science of running governmental or state affairs, including behavior within civil governments, but also applies to institutions, fields, and special interest groups such as the...

, a war chest is funding obtained from donors well in advance of a campaign, usually accumulated by an incumbent for either re-election or to contest a more advanced office, or provided by a wealthy candidate to their own campaign. The possession of such excess funds may discourage otherwise viable candidates from a primary or general election challenge.

In business

In business
Business
A business is an organization engaged in the trade of goods, services, or both to consumers. Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit...

 a war chest, or cash mountain is a stash of money set aside to deal with unexpected changes in the business environment, or to use when expansion possibilities arise.
The term originates with the medieval practice of having a chest
Chest (furniture)
A chest is one of the oldest forms of furniture. It is typically a rectangular structure with four walls and a liftable lid, for storage. The interior space may be subdivided...

, literally, filled with money to open in time of war
War
War is a state of organized, armed, and often prolonged conflict carried on between states, nations, or other parties typified by extreme aggression, social disruption, and usually high mortality. War should be understood as an actual, intentional and widespread armed conflict between political...

.

Today companies can use accumulated cash or rely on quickly raised debt
Debt
A debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.A debt is created when a...

 which costs less to carry when you don't need it. This is not always a reasonable substitute, as the debt available to a company typically drops as a result of the same actions that require the war chest to be opened.

Companies can redistribute their war chests to shareholder
Shareholder
A shareholder or stockholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders own the stock, but not the corporation itself ....

s by issuing larger or special dividend
Dividend
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...

s, or more commonly through share buyback
Share repurchase
Stock repurchase is the reacquisition by a company of its own stock. In some countries, including the U.S. and the UK, a corporation can repurchase its own stock by distributing cash to existing shareholders in exchange for a fraction of the company's outstanding equity; that is, cash is exchanged...

 operations. Companies do this because if actually held in cash, the companies will be earning a low rate of return in the money market
Money market
The money market is a component of the financial markets for assets involved in short-term borrowing and lending with original maturities of one year or shorter time frames. Trading in the money markets involves Treasury bills, commercial paper, bankers' acceptances, certificates of deposit,...

s, whereas they could be using the funds to invest in more profitable projects. If they continue not to invest the funds, shareholders may sell the company's shares and make it vulnerable to a takeover. This would place the current management's jobs at risk.

In professional sports

In football it refers to the amount of money a manager has been given by a club's chairman, owner or investors to acquire new players, as in the newspaper headline, "Defoe
Jermain Defoe
Jermain Colin Defoe is an English footballer who plays as a striker for English Premier League club Tottenham Hotspur, and the England national football team....

 and Brown
Wes Brown
Wesley Michael "Wes" Brown is an English footballer who plays as a defender for Sunderland. Before joining Sunderland, Brown had spent his entire career at Old Trafford, having joined the Manchester United youth team in 1996...

 top Keegan
Kevin Keegan
Joseph Kevin Keegan, OBE is a former international footballer and former manager of the England national football team and several English clubs, most notably Newcastle United....

 wishlist as Ashley
Mike Ashley (businessman)
Michael James Wallace "Mike" Ashley is an English millionaire retail entrepreneur in the sporting goods market...

grants £25m war chest".

Related terms

War chests are also referred to as surplus cash, cash reserves, emergency reserves, acquisition funds, rainy day funds, or undistributed earnings within different contexts.
The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
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