Gavekal Capital: Cash Levels On the Rise for the Average European Company? Not So Much.

Monday, September 15, 2014

Cash Levels On the Rise for the Average European Company? Not So Much.

An article in the Financial Times (subscribers, see here) prompted us to ask ourselves, 'Really??' and take a high level look at cash (and debt) levels in the various regions of the MSCI World. Compared to the Asia-Pacific and North American regions, the trend in cash as a percent of total capital is actually not so great for European companies, on average:

Similarly, the trend for debt among constituents of MSCI Europe is less encouraging than that in the other regions:

Sure, individual companies have made progress in strengthening cash cushions on their balance sheets. On the whole, however, it seems that European companies have more work to do here.

About Gavekal Capital

Gavekal Capital is a US registered investment advisory firm that manages the Gavekal Knowledge Leaders Strategy. Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge or a unique distribution mechanism. Knowledge Leaders are largely service-based and advanced manufacturing businesses, often operating globally. Gavekal Capital seeks to identify the world’s leading knowledge companies through a proprietary process that analyzes corporate knowledge investments.
We offer the Gavekal Knowledge Leaders Strategy in multiple products for global investors. For more information about our product offerings please visit http://www.gavekalcapital.com.
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