Where’s the Cash? The Sectors Holding the Most Cash in Treasury

May 1, 2012 Bhaji Illuminati

findingSince we’re into maximizing returns on cash for treasury, through our Dynamic Discounting solutions, and helping to optimize the invoicing process for buyers and suppliers, we thought we’d get an update for ourselves on where all that cash is sitting in our economy. As of April, 2012, did you know that the top 80 US cash holding companies are sitting on $425 trillion in cash? It’s not just working capital- these companies have good quick ratios (2x coverage on average).

So where's the money? It’s concentrated as you would expect, by sector, by geography and by company.

  • 80% is concentrated in 4 states: 34% in CA, 13.4% NY, 12.1% NJ, 14.3% WA
  • 8 companies have over $10TR in cash each, or 54% of the cash . These top 8 companies are in 2 sectors: 135TR is concentrated in Tech and 95 TR in Pharma

With returns on low risk investments running in the low single digits, there seems to be a lot of opportunity for treasury to do even better by looking into supply chain financing alternatives.

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