I am an engineer who is increasingly interested in business-related things, and I am reading and learning a lot about what you can derive e.g. from financial statements.
One question I was wondering about is: How can I determine the size of an M&A war chest of a company?
This question is inspired by the following article: http://www.fool.com/investing/2016/07/11/how-apple-can-use-its-233-billion-war-chest.aspx where they determined how big the war chest is.
I am actually not able to retrace the steps, as it seems to me that the calculation was: Total Assets - Total current liabilites - but my assumption would have been that you cannot just take the entire positions?
I was thinking more along the lines of: Cash+Cash equivalent+liquid short-term investments-short-term debt = war chest
Is it correct to say, that the possibilities with the war chests are: 1) Share buybacks 2) M&A 3) Dividend payout
Thank you for your help :)