Context is everything - without seeing the big picture, it is easy to get distracted and misled by a little nugget of information. That would appear to be the case when contemplating the balance sheet of "Corporate America". While there has been a fair bit of attention to the rising cash levels of the balance sheets of public companies, there is critical detail that goes missing in many of these stories. Debt is also climbing.
More and More CashA recent article in Bloomberg Businessweek pointed out a significant increase in cash for the S&P industrials. For the second quarter, cash holdings stood at more than $842 billion, up from nearly $837 billion in the first quarter and representing more than 11% of current market value. The information technology sector likewise appears flush with cash, with holdings equivalent to 18% of market value and more than two years' worth of operating income.
Doing some spot-checking here and there would seem to confirm this trend. Cisco (Nasdaq:CSCO) and Apple (Nasdaq:AAPL) have huge amounts of cash on hand, as do Microsoft (Nasdaq:MSFT), Google (Nasdaq:GOOG), Pfizer (NYSE:PFE) and Wal-Mart (NYSE:WMT).
Please follow the link for the full piece.
http://financialedge.investopedia.com/financial-edge/0910/Rising-Cash---And-Rising-Debt-Too.aspx
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