Cash Levels

Cash Levels

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Over the last few weeks, we have been considering the causes of the rising cash levels at US companies. First, I looked at what academia had to say about it and then realized that the question asked was the wrong one.

Today, I’ll look into how much cash is held at companies in various countries across Asia. The data is a bottom-up aggregate of 17,700 companies worldwide and includes 4,700 Asian companies.

Companies in Asia have always kept lots of cash

Cash Levels

Why is this useful?

One of the most common mistakes when valuing companies is the excessive build-up of cash in forecasted years. Understanding average cash levels of companies in various countries can be used as a guide.

An even more relevant measure is cash at companies in a particular sector, within a certain country, a subject I will cover in another piece of research.

Taiwanese companies have the most cash, New Zealand and Australia companies have least

Cash Levels

Cash levels of markets in Asia based on stage of development of market

Cash Levels

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About the Author

Dr. Andrew Stotz, CFA
Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company providing institutional investors with ready-to- invest portfolios in Asia that aim to beat the benchmark through superior stock selection. The company also provides buy- and sell-side clients with financial models to value any company in the world and World Class Benchmarking to determine what companies are financially world class. Previously, as Head of Research at CLSA, Andrew was voted No. 1 Analyst in Thailand in the Asiamoney Brokers Polls for 2008 and 2009. He was also voted No. 1 Analyst in Thailand in the 2009 Institutional Investor magazine All-Asia Research Team Report. Andrew earned his PhD in finance at the University of Science and Technology of China in Anhui province, with a focus on answering questions raised by fund managers and analysts during his career about picking stocks and managing portfolios. In addition, Andrew has been a lecturer in finance for 22 years at various universities in Thailand. Since 2013, he has been the president of the CFA Society of Thailand. He is also the author of How to Start Building Your Wealth Investing in the Stock Market.

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