How Firms Will Spend Their Cash In 2016

S&P 500 firms are sitting on a record amount of cash. Cash balances total $1.5 trillion (excluding financials), which works out as 11% of total assets. And according to Goldman Sachs, S&P 500 firms will spend a total of $2.2 trillion in cash during 2016, allocating 54% to growth spending and 46% to shareholder returns.

All in all, S&P 500 cash use will increase by a modest 5% during 2016, with spending on investments growing by 3% and returns to shareholders rising by 7%. Lower oil prices coupled with the global economic slowdown will continue to weigh on capital spending and modest US GDP growth of around 2% will sustain the popularity of buybacks and dividends according to Goldman's analysts.

Cash...

Login required to continue reading.

Setup a free account to get access to this article (no credit card required).

View Full Article

Already a member? Log in here