Where do companies keep their cash?

by Mick Weinstein|Published October 3, 2011

The Federal Reserve reported in mid-September that non-financial American companies held more than $2 trillion on their balance sheets as of the end of June, the highest figure for any time since 1963. So where does all this money go?

Paddy Hirsch of Marketplace makes a helpful comparison to a body’s use of fuel:

Sources:

Federal Reserve, Flow of Funds Accounts 9/16/11 http://www.federalreserve.gov/releases/z1/current/z1r-1.pdf

“Companies Shun Investment, Hoard Cash” Justin Lahart and Ben Casselman, The Wall Street Journal, 9/17/11 http://online.wsj.com/article/SB10001424053111903927204576574720017009568.html?mod=googlenews_wsj

Marketplace, “WHITEBOARD: What do companies do with all that cash?” Paddy Hirsch, 9/30/11 http://www.publicradio.org/columns/marketplace/whiteboard-blog/2011/09/whiteboard_what_do_companies_d.html

AUTHOR

Mick Weinstein

Mick is the Head of Editorial for Covestor, a financial journalist and online content specialist. Prior to joining Covestor, Mick was for five years the Editor in Chief and VP Content at stock market analysis website Seeking Alpha, where he built the editorial function as the site attracted over 3.5 million unique monthly visitors and developed an innovative platform for intelligent stock market discussion. Mick is a graduate of the University of Michigan, Ann Arbor.

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