The Australian Cash Paradox

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The Australian Cash Paradox

It’s time to shift the corporate agenda

Record levels of passive cash reserves are destroying shareholder value for corporate Australia – lazy capital delivers lazy growth. It’s time to shift the corporate agenda and re-focus on growth and M&A.

The Australian Cash Paradox

The world’s largest 1,000 public companies (excluding those in financial services) held US$3.5 trillion in cash reserves at the end of last reporting season – more than the annual GDP of a powerhouse like Germany.

Here in Australia, Deloitte’s research has revealed that a small number of companies are holding most of the country’s corporate cash war chest – just 20% of ASX 200 non-financial companies have accumulated 82% of total cash reserves.

These cash-rich corporates have been underperforming by a factor of three since the GFC compared to companies with relatively small cash-holdings, measured either by quarterly revenue growth or share price performance, thus creating a paradox. 

This report examines how forward-thinking companies are using their cash reserves to propel growth, uncovering what makes them succeed and identifies opportunities for cash-rich corporates to deliver better shareholder value.

It’s time to address the cash paradox in corporate Australia.

The Australian Cash Paradox

The Australian Cash Paradox Infographic

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