Only Half of U.S. Corporate Cash Stays at Home: Chart of the Day
Cash levels for U.S. companies are losing their meaning for the country’s economy because so much of the money is held elsewhere these days, according to Dane Mott, a JPMorgan Chase & Co. analyst.
Mott drew his conclusion from a review of 258 companies that disclose cash and securities holdings outside their home country. The total amount was equivalent to 50 percent of these companies’ overall balances, he wrote two days ago in a report. Apple Inc. had the most outside the U.S. at $47.6 billion.
The CHART OF THE DAY shows how the percentage of Apple’s cash held internationally has risen since 2007, when the maker of iPhones and iPad tablet computers started to include balance amounts in quarterly reports.
Apple, based in Cupertino, California, has kept a majority of its cash and securities outside the U.S. for the last eight quarters, according to data compiled by Bloomberg. As of June 25, the proportion stood at 62.5 percent.
“It is increasingly difficult to consider corporate cash levels to be any kind of specific indicator about the health of the U.S. economy,” Mott, who is based in San Francisco, wrote in the note. They appear to have “more to do with global economic performance.”
The 258 companies studied had a total of $368 billion in non-U.S. cash balances. Microsoft Corp. (MSFT) was second to Apple at $45 billion, followed by Cisco Systems Inc. (CSCO) at $38.8 billion and Oracle Corp. at $20.4 billion.
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