March 2008 - Cash & Risk: Total cash held by companies in S&P 500 industrial index exceeded $600 billion in February 2008, up from about $203 billion in 1998; increased risks (currency risk, political risk, commodities shortages, new competition), increased savings (decline in capital spending on fixed assets, increased spending in R&D; cash ratio (cash, short-term investments) as % of total assets as high as in 1960s (Apple - 38% in 1988 to more than 60% in 2007; Avon Products - less than 3% in 1988 to 17% in December 2007; doubled for technology companies since 2000); net debt ratio (debt minus cash as % of total assets) - less than 0 by 2004 through 2006) = on average, cash on hand could retire outstanding debt.
(Source: Prof. Thomas W. Bates, U. of Arizona, Kathleen M. Kahle, U. of Arizona, Rene M. Stulz, Ohio State University, Thomson Proprietary Research)
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