Companies follow a U-shaped pattern of cash holdings across their lifespan: • Firms in the introduction stage hold the most cash — with cash making up nearly a third of their assets. This is perhaps because they raise a lot of money, and then slowly burn through it all developing new products, and building their market.

• As companies mature, with e

intangibles like patents and other forms of knowledge. And that’s around when companies started holding on to more cash

Well, that’s perhaps because different industries have different sorts of assets. Traditional companies have large reserves of tangible assets, like buildings or machines. More new age companies, on the other hand, are likely to have intangible assets — like algorithms, or patents.

Now, if you need cash in a pinch, you’re much better off with tangib

Pharma and biotech firms top the charts — over 55% of their total assets are held in cash, or in other assets that can quickly be turned into cash. Software companies, too, hold more than 30% of their assets in cash.

At the other end of the spectrum, traditional industries like energy, at 4%, and utilities, at less than 1%, maintain far leaner cash

lately (and interestingly), companies across the world have recently been holding way more cash than they might ever need.

Listed US companies held nearly $2.5 trillion in just cash at the end of 2024 — about 4.7% of their total market cap. From 5.8% in the thirty years between 1970-2000, cash has risen to ~9.7% of companies’ assets between 2001-202