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Citi credit strategist <keyword id="1606097" type="PERSON" weightage="20" keywordseo="Jason-Shoup">Jason Shoup</keyword> offers an interesting stat about corporate <keyword id="37885" type="ORGANIZATION" weightage="60" keywordseo="Cash">cash</keyword> balances in a recent note to clients.<br /><br />

"Using the Russell 3000 as a universe, we see that the top 20 corporates with the most cash on their balance sheets at the end of 2012 hold over $650 billion - almost 40% of all the cash and marketable securities of Russell 3000 companies," writes Shoup. "And among those top 20 companies, cash balances have grown between 15-20% for the last year, while the rest of the companies have seen far lower growth in the 0-5% range (see figure)."<br /><br />

It gives you a sense of how skewed things can be in the financial markets.<br /><p><br /></p>

20 Companies Hold 40% Of The Cash In The Russell 3000

<div style="float: right; margin: 15px 0 20px 20px;"><table border="0" cellspacing="0" cellpadding="0"><tbody><tr><td colspan="2"><a href="http://static6.businessinsider.com/category/chart-of-the-day"> </a></td></tr><tr><td><a href="http://www.businessinsider.com/sp-500-priced-in-gold-2013-3"></a></td><td><a href="http://www.businessinsider.com/chart-of-the-day-january-case-shiller-2013-3"></a></td></tr></tbody></table></div><p>Wall Street pundits talk about it all the time: corporations are sitting on record levels of <keyword id="37885" type="ORGANIZATION" weightage="60" keywordseo="Cash">cash</keyword>.</p>
<p>According to Moody's, non-financial corporations are sitting on <a href="http://www.businessinsider.com/ceo-compensation-and-dividends-2013-3">around $1.5 trillion worth of cash</a>.</p>
<p>Bulls argue that this means companies could unleash this cash in the forms of capital expenditures, mergers and acquisitions, dividends, and share buybacks.</p>
<p>However, Citi High Grade Credit Strategist Jason Shoup thinks this assessment is a bit short-sighted.</p>
<p>"When it comes to popular finance myths, cash hoarding by corporates may be one of the most perpetuated," he says.  "What's misguided is the narrative, in our view, in particular among equity investors. What we most take issue with is the implication that corporates have lots of cash to return to shareholders. Indeed, there's plenty of data to the contrary that challenges the prevailing notion that corporates are the picture of good health."</p>
<p>Shoup argues that we need to consider cash relative to other financial metrics.</p>
<p>For example, he looks at cash relative to debt, which is considered a proxy for a company's a ability to service its liabilities.</p>
<p>"That ratio is rapidly plunging and, at least to our minds, implies that further shareholder friendly behavior will likely be funded with more borrowing at the margin," he writes.</p>
<p>Check it out:</p>
<p><table class="image-container" width="200"><tr><td><div class="image"></div><p class="source">Citi Research</p></td></tr></table></p>

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