Corporations hold large amounts of cash for a variety of reasons, including speculation on the price of assets, corporate acquisitions, future investments or even as a precaution against market uncertainty.
If a company holds more cash or highly liquid assets as a large proportion of their total assets and relative to their peers, investors can draw insight into the size and scope of a company’s future investments. Keep in mind that some industries by their nature will have much more hard assets than others, such as utilities, for example.
To get an idea of the companies that are holding the most cash, CNBC.com did an analysis of cash and short term, highly-liquid investments held by S&P 500 companies as a ratio of total assets, using data from Capital IQ. Financial companies are excluded from this list since they inherently hold large amounts of cash.
For the purpose of this slideshow, “liquid assets” are defined as total cash and short term investments held by an individual company.
So, which S&P 500 companies are the most cash-rich? Click ahead to find out!
By Giovanny Moreano & Paul Toscano
Posted 1 July 2010