Chemical Companies9 Cash Rose Markedly Last Year

Abstract

In these days of rapidly increasing corporate profits in the chemical industry, there is only so much that companies can do with the cash that they are receiving. They can increase dividends, they can use it to modernize plants, they can pay down debt, or they can hold on to it. And U.S. chemical firms seem to be doing all of these—but especially they are holding on to their money. A C&EN survey of 20 U.S. chemical companies shows that the total of cash and marketable securities and current assets increased markedly in 1987 and current liabilities increased much more slowly. The result was increasing liquidity ratios for the firms. The pattern among the companies is following that usually seen well into an economic recovery. The earnings momentum is providing cash for the chemical companies fast enough that they are having trouble getting rid of it. At the same time, however, current liabilities, the day-to-day ...