The 10 American Companies With the Most Cash
As the U.S. economy starts to shut down, cash is king. It is obvious how important this is when airlines need billions of dollars of aid from the government. American aviation giant Boeing is another example. It needs a government bailout to stay in business. Many retailers have been nearly wrecked as their sales have cratered and their balance sheets are weak.
However, 10 public corporations have a tremendous amount of cash on their balance sheets. In some cases, those cash piles are growing.
Some other companies have cut dividends to preserve cash. Even public corporations with huge cash reserves need to save it. The most visible cut is at Ford. It chopped a dividend that was resumed after the Great Recession. The cut was not enough to satisfy credit agency analysts. S&P Global Ratings lowered Ford’s debt into junk levels, a new grade of BB+. Its analysts said the agency might not be done with downgrades. The reason for the action was that Ford might consume as much as $8 billion of its $37.7 billion over the next year.
Factset said late last year that the following companies had the most cash on hand.
Microsoft Corp. (NASDAQ: MSFT): $136.6 billion. Its sales and cash contribution are increasing as sales of its cloud-based Azure products continue to grow. Its business software is ubiquitous on services and PCs. And its more recent success in hardware means it will continue to add cash to its balance sheet. In its most recently reported quarter, revenue was $36.9 billion, up 14% from a year earlier. Net income was $11.6 billion, up 38%.
Berkshire Hathaway Inc. (NYSE: BRK-B): $128.2 billion. The most multilegged large company in America, it has both dozens of operating companies and investment positions in dozens of others. Helmed by the world’s most famous investor, Warren Buffett, Berkshire Hathaway had earnings of $29.2 billion last quarter. Buffett has been criticized for not making more acquisitions with the money.
Alphabet Inc. (NASDAQ: GOOGL): $121.2 billion. The Google division of the company is one of the most successful businesses in the world. It leads search engine market share in every large nation in the world, with the exception of China and Russia. This extraordinary lead position means it dominates these markets in terms of advertising revenue. In the most recent quarter, Alphabet had revenue of $39 billion, on which it had $9 billion in net income. The net cash from operating activities was $14.4 billion.
Apple Inc. (NASDAQ: AAPL): $106.0 billion. Apple’s net cash from operating income was $30 billion last quarter. It is added to its cash hoard at an extraordinary rate. Sales of the iPhone, iPad, Mac, Apple Watch and services were all up in the quarter. Compared to what they sell for, Apple’s cost to manufacture these is modest. It is estimated that iPhone profits are 90% of all smartphone profits in the world.