Friday, July 16, 2010

Liquid Assets

One year after the recession began total corporate liquid assets dipped to $ 1.4 trillion in 4Q 2008... the five quarters since (through the first quarter of this year), total liquid assets increased dramatically to $1.8 trillion (an increase of $400 billion) while liquid assets as a percent of total corporate assets—on a market value basis—increased from 5% to 7%.

That means that seven cents of every dollar of total corporate assets (the sum of the market value of its capital structure consisting of short- and long-term debt plus shareholder equity) is now invested in the equivalent of a corporate "piggy bank" as opposed to investments in its long-term productive capital (expected to earn a return in excess of a company's cost of capital).

Check out the full article.


This site does not provide investing recommendations as that comes down to individual circumstances. Instead, it is for generalized informational, educational, and entertainment purposes. Visitors should always do their own research and consult, as needed, with a financial adviser that's familiar with the individual circumstances before making any investment decisions. Bottom line: The opinions found here should never be considered specific individualized investment advice and never a recommendation to buy or sell anything.