Where do companies keep their cash?

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

  • Jwjazz2011

    So, a corporation uses its cash to buy, say, short term securities.  What then?  Where does that cash go?  PS:  distinguish cash from currency.