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Cross-Market Commentary: Cash Balance For S&P 500 Nonfinancials Passes $1 Trillion Mark For Second Consecutive Quarter
Standard & Poors, May 2011
As the first-quarter financial reporting season for S&P 500 companies approaches its end, the Valuation and Risk Strategies (VRS) research team wanted to determine the future levels of cash on the corporate balance sheets. Specifically, with the recent high rate of cash merger and acquisitions (M&A) deals, renewed buyback activity, and increased dividend payouts by some corporations, there is a possibility that cash balances may be declining. Therefore, we reviewed S&P 500 first-quarter 2011 results among nonfinancial companies to find out where cash balances are headed and which industries are standing out. According to Capital IQ data from 376 nonfinancial S&P 500 companies, or about 91% of the nonfinancial companies in the S&P 500, aggregate cash and short-term investment balances...
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Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.