Firms_ Cash - July 21, 2006 TRACKING THE NUMBERS Outside...

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TRACKING THE NUMBERS DOW JONES REPRINTS This copy is for your personal, non- commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, use the Order Reprints tool at the bottom of any article or visit: www.djreprints.com . See a sample reprint in PDF format . Order a reprint of this article now . July 21, 2006 Outside Audit Capital Pains: Big Cash Hoards Companies' Growing Coffers Draw Investor Calls for Action; Deals, Buybacks Make Little Dent By IAN MCDONALD July 21, 2006; Page C1 Many Americans need to look for ways to curb their spending. Big U.S. companies have the opposite problem. The piles of cash and stockpile of repurchased shares at these companies have hit record levels and continue to grow along with corporate earnings, creating challenges for the executives who must decide how to allocate all that capital. While some investors carp about managers hoarding cash rather than building their businesses, data show companies have in fact been reinvesting in themselves. Some are also acquiring other companies, although these deals are often smaller in scope than the takeovers executed in the go-go late 1990s, as executives don't want to undertake expensive deals that could hamper investor returns for years to come. The cash figures are also becoming so large that they are skewing some of the yardsticks used to gauge corporate performance. For example, with more companies seeing bigger portions of their bottom line accounted for by interest income, it becomes harder for Main Street investors to gauge how well some corporate managers are running core operations. "They've been generating an unprecedented amount of cash, and they're having a hard time figuring out what to do with it in a lot of cases," says Mark Zandi, chief economist at the Web site Moody's Economy.com, a unit of Moody's Corp.
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Firms_ Cash - July 21, 2006 TRACKING THE NUMBERS Outside...

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