Editor’s note: This article was first published in August 2014, and all its cash figures are from 2014, including $7 trillion across 5,100 companies, Apple at $140 billion and Microsoft at $83 billion. Its example of buying Twitter and Tesla uses 2014 market values.
The world’s largest companies have built up more than $7 trillion in cash, which is not really good news, since it shows the bottleneck the economy is caught in. Those $7 trillion are spread across the 5,100 largest companies in the world, according to The Telegraph.
Just a handful of US companies account for $2 trillion, most of it held by the tech giants, which have proved so efficient that they can generate tons of money with far fewer resources.
The company at the top of the ranking (which only covers American and London companies) is, as you might expect, Apple, with $140 billion in cash, making it the US company with the most unused capital. To put it in practical terms, that amount would let it buy Twitter and Tesla Motors and still have $80 billion left over to invest.
Second comes Microsoft, with $83 billion in cash. Even so, the company is considering the biggest cutback in its history, with plans to lay off 18,000 employees.
Third is Google, which has managed to accumulate as much as $59 billion in cash.
As things stand, these would be the three most financially solid American companies in existence (see: in 5 years, Google will be the most valuable company in the world).
In London, the pharmaceutical company AstraZeneca has 8 billion in untapped capital reserves, followed by the mining companies Anglo American, with 7.7 billion, and BHP Billiton, with 5.6 billion.
Laurence Hollingworth of JPMorgan believes that cash on a company’s balance sheet can make investors nervous, so that money should go towards mergers and acquisitions, towards investment in the company itself to keep growing organically, or back to shareholders as dividends or share buybacks.
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Featured image: Blake Patterson, CC BY 2.0, via Flickr.
