Nums: What do corps do with their cash?

Well, besides sitting on it – on-shore or off-shore — corporations have five basic uses for the cash that they bring in:

  1. share buybacks;
  2. dividends;
  3. acquisitions;
  4. research and development;
  5. capital expenditures

Bellow is Goldman Sachs’ estimate of the split.

image
Source

Bottom line: about a 60% – 40% split between growth (acquisitions, R&D, and CapEx .… and shareholder distributions (stock buybacks & dividends).

Historically, the split was more like 75%  – 25%.

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