Thank you!

Out of curiosity, how did you put together that list? Googling seems to only bring up second-hand lists like https://thenextweb.com/insider/2011/08/22/big-money-the-comp... but I think I'm using the wrong terms.

(That's an interesting list too -- for comparison, Apple apparently had $76.2B in 2011.)

I put most of it together off the top of my head, from knowing a bunch of the companies that were cash rich, then checked on a few I suspected were (like Samsung), and then finally cross checked a few lists for any stragglers I missed (eg Amgen). I dug through some of China's companies (eg BABA or CHL), but didn't run across any offhand that made the list (their banks obviously do as with US banks).

Apple is also running up quite the debt (over $100B) in the US so the overall figure is actually lower.

http://www.barrons.com/articles/apple-plans-to-sell-lots-of-...

They do that because interest rates are low and much of their cash hasn't been repatriated (taxed) to the USA.

Yes, but that doesn't really change the fact that their money in the bank needs to be considered partially encumbered.

And to be fair, "ignoring debt" is kind of an odd way to measure something like "who is sitting on cash"

It is odd, but not as ridiculous as it sounds. For one, many companies couldn't issue 10s of billions in debt so you do have access to that much capital (normally at reasonable costs).

Think of it not as "what's their net worth" and more as "what's the biggest cheque they could write today that wouldn't bounce."

That would hopefully be a much smaller number, unless they're all storing their entire cash reserves in a single account somewhere.

In any real scenario, debt should obviously never be ignored, but we're counting cash in a vacuum here basically.

Some of these companies are carrying vast amounts of debt now, Microsoft and Apple for example. They can't discharge all of that cash without suffering severe consequences due to their need to sustain a high credit rating.

I added the ignoring debt tag, because who knows which of those cash / cash-like instruments are being used in what way in relation to some of those immense debt piles.

> They can't discharge all of that cash without suffering severe consequences due to their need to sustain a high credit rating.

What do you mean by this?

Microsoft for example has $76 billion in debt, accumulating at a rapid pace. Apple is in a similar situation. They're adding debt at a historic pace.

Despite the immense profitability the companies have, their debt holders will get freaked out if those large cash piles were to get discharged down toward zero. For example, Berkshire Hathaway got slapped for allowing its cash to drop a bit low (relatively speaking) a number of years ago (also coincided with the worst of the great recession), their credit rating got dropped a notch in part because of it (despite it being very unrealistic they were actually more risky just because cash was briefly at $30 billion versus $50 billion). You'll often see the ratings agencies & analysts talk about wanting to see Berkshire maintain a large amount of cash due to its obligations.

Apple and Microsoft are paying very, very low interest rates on their debt. Given the scale of those debt piles now, they'll desperately want to maintain those low rates. Maintaining a sizable pile of cash will assist them in doing so.

I am naive in this area, but if the creditors freak out, what does that mean? Seems like a "freak out" would mean higher interest rates, and when those rates cross the return from the cash stockpile, they just would stay paying down the debt more aggressively?

Sure; it's just that we're talking about spending the cash stockpile. Microsoft has $126b "in the bank" but that doesn't mean they could actually spend all $126b on some moonshot, because by the time they'd spent half of it it would affect their interest rates and they'd have to start doing something about their debt.

They take on debt instead of drawing down their cash pile because they'd be paying much higher taxes on foreign cash than interest on their loans. The low rate they receive on loans is tied to the existence of their massive cash piles

If they spent all of their cash (in a not-obviously-investment way) it would hurt their credit rating (and their business can't operate the way it does without a high credit rating). So they might have $43B (say) "in the bank", but that doesn't necessarily mean they could actually spend that $43B if the debt markets didn't think what they were spending it on was sensible.

Ford has $40b cash and its market cap is $43b ?? I should buy some.

Edit: I guess I missed "Ignoring Debt" they have too much debt.

About $70Bn in short-term debt liabilities. [0] May create some hesitation in buying ;)

[0] https://finance.yahoo.com/quote/F/balance-sheet?p=F

Maybe. Net tangible assets are $30 billion. Obviously much like GM, they're carrying a large pile of liabilities around on their balance sheet. I suspect Ford has to keep a significant amount of cash on hand for numerous legacy reasons (pensions?) to support their credit rating. $244b in assets stacked against $213b in liabilities.

GM is far more profitable than Ford, has $22b in cash, and $39b in net tangible assets. With a $53b market cap, GM is sporting a realistic 4.x to 5.x PE ratio currently (depending on how you want to account for their 4Q16).

This is a problem, a lot of money that is not going back to the market. It's taken out of economy making it impossible to redistribute it again. It's not healthy.

as I understand it, that cash is not sitting in actual bills under mattresses, it's sitting in bank accounts of some sort or other (could be short-term notes perhaps and still qualify as 'cash'). Those banks in turn invest those funds (in loans, etc) to other people and businesses. So the money isn't completely taken out of the economy - it stays in the system and is put to work (by other people). So I'm not sure how it's an actual problem for the economy.