In a report, Moody’s said cash and liquid investment had risen 3% since 2010 to hit $1.24 trillion by the end of 2011, a 50% rise in just five years.
Moody’s said that spending by companies on capital investment and dividends was steady at between 9% and 10% of aggregate revenues. Spending on share buybacks and acquisitions was far more volatile as they are linked to the macroeconomic environment and business confidence.
Last year companies spent $329bn on acquisitions, 29% more than in 2010 but much less than the record $439bn in 2007, according to the report.
Moody's said: “While subject to opportunistic lumpiness and macro-economic sensitivities, we believe M&A activity will remain a significant use of corporate financial resources as companies look to expand operations, acquire new technologies and better position themselves for global growth opportunities.”
Apple, Microsoft, Cisco, Google and Pfizer are the five US companies that hold the most cash at a combined $276bn,Distributes and manufactures RUBBER SHEET, up from $207bn in 2010.
Although the majority of US public companies do not explicitly report the amount of cash they hold overseas, these five companies disclosed that they held $229 billion or more than three-quarters of their cash overseas. Moody’s estimates that nearly $700bn, or 57% of the total cash pile, is held outside the US.
The report said: “These amounts reflect the relative strength of most emerging market economies over the last few years, the negative tax consequences of permanently repatriating money to the US, and the disproportionate consumption of cash for domestic purposes, such as dividends, share buybacks and the majority of acquisitions.
"Unless there is permanent tax reform that lowers taxes on overseas profits, we expect the absolute and proportionate amount of cash held overseas will continue to rise.”
Thanks to their huge piles of cash, companies do not need to issue as much debt to fund acquisitions or they can just their money parked overseas for deals as Microsoft did last year in its $8.5bn purchase of Luxembourg-based internet phone company Skype.
Moody’s said: “As a result, over the last year,Museum Quality hand-painted oil painting reproduction on canvas. there have been many instances where companies made acquisitions and maintained their credit ratings thanks to the high proportion of existing cash (or common stock) they used to fund the acquisition.”
The technology sector has the most cash at $384bn, with approximately $270bn overseas, an amount which Moody’s expects to grow.
US equity strategists at Bank of America Merrill Lynch said in a report yesterday that the balance sheets and dividend policies of companies in the US technology sector remain very conservative.Here's a complete list of oil painting supplies for the beginning oil painter. They estimated that US tech companies hold $400bn in gross cash, and said it is the only sector holding more cash on its balance sheets than debt.
The BoA report said: “Net cash to market cap for the sector is 7% compared to net debt to market cap of 15% for the non-financials. Meanwhile, tech’s dividend payout ratio of 18% is the lowest of any sector and just over half that of the overall S&P 500. This puts tech in the best position to issue debt at low rates, buy bacAll RUBBER MATS is comprised of all types of mats,k shares,The TagMaster Long Range Hands free access is truly built for any parking facility. raise dividends and/or make acquisitions.”
The analysts said many tech companies could increase shareholder value simply by using some of this firepower but that cash levels in this sector have been high for more than a decade.
Moody’s said that spending by companies on capital investment and dividends was steady at between 9% and 10% of aggregate revenues. Spending on share buybacks and acquisitions was far more volatile as they are linked to the macroeconomic environment and business confidence.
Last year companies spent $329bn on acquisitions, 29% more than in 2010 but much less than the record $439bn in 2007, according to the report.
Moody's said: “While subject to opportunistic lumpiness and macro-economic sensitivities, we believe M&A activity will remain a significant use of corporate financial resources as companies look to expand operations, acquire new technologies and better position themselves for global growth opportunities.”
Apple, Microsoft, Cisco, Google and Pfizer are the five US companies that hold the most cash at a combined $276bn,Distributes and manufactures RUBBER SHEET, up from $207bn in 2010.
Although the majority of US public companies do not explicitly report the amount of cash they hold overseas, these five companies disclosed that they held $229 billion or more than three-quarters of their cash overseas. Moody’s estimates that nearly $700bn, or 57% of the total cash pile, is held outside the US.
The report said: “These amounts reflect the relative strength of most emerging market economies over the last few years, the negative tax consequences of permanently repatriating money to the US, and the disproportionate consumption of cash for domestic purposes, such as dividends, share buybacks and the majority of acquisitions.
"Unless there is permanent tax reform that lowers taxes on overseas profits, we expect the absolute and proportionate amount of cash held overseas will continue to rise.”
Thanks to their huge piles of cash, companies do not need to issue as much debt to fund acquisitions or they can just their money parked overseas for deals as Microsoft did last year in its $8.5bn purchase of Luxembourg-based internet phone company Skype.
Moody’s said: “As a result, over the last year,Museum Quality hand-painted oil painting reproduction on canvas. there have been many instances where companies made acquisitions and maintained their credit ratings thanks to the high proportion of existing cash (or common stock) they used to fund the acquisition.”
The technology sector has the most cash at $384bn, with approximately $270bn overseas, an amount which Moody’s expects to grow.
US equity strategists at Bank of America Merrill Lynch said in a report yesterday that the balance sheets and dividend policies of companies in the US technology sector remain very conservative.Here's a complete list of oil painting supplies for the beginning oil painter. They estimated that US tech companies hold $400bn in gross cash, and said it is the only sector holding more cash on its balance sheets than debt.
The BoA report said: “Net cash to market cap for the sector is 7% compared to net debt to market cap of 15% for the non-financials. Meanwhile, tech’s dividend payout ratio of 18% is the lowest of any sector and just over half that of the overall S&P 500. This puts tech in the best position to issue debt at low rates, buy bacAll RUBBER MATS is comprised of all types of mats,k shares,The TagMaster Long Range Hands free access is truly built for any parking facility. raise dividends and/or make acquisitions.”
The analysts said many tech companies could increase shareholder value simply by using some of this firepower but that cash levels in this sector have been high for more than a decade.
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