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Balance Sheets 101: Who Might Survive This Crisis

Editor's note: In the last two quarterly earnings seasons, Scott Rothbort graded several corporate balance sheets:

  • "Balance Sheets 101: Who Made the Grade" (Spring 2008)
  • "Balance Sheets 101: Who Made the Grade" (Summer 2008)
  • As the current earnings season starts to wind down, Rothbort evaluates a new set of balance sheets, and few new metrics.

    We are in the middle of one of the worst credit crises in the history of corporate America. That said, let's examine the financial qualities to look for in companies that have the potential to survive the current "crunch."

    Net Cash and Enterprise Value

    With so much focus lately on which companies have too much debt, I suggest we need to look in the other direction: Companies that are flush with cash and have little or no debt. In particular, I was struck by Apple's (AAPL - Get Report) recent earnings announcement and conference call. (Don't miss " Apple Brings Bright Spot to Tech")

    TheStreet.com TV: Apple Call Shocker: Jobs Talks Surplus (Video, Oct. 23)

    Gary Krakow and James Rogers dissect the finer points of Apple's earnings call and Steve Jobs' remarks about iPhone sales, the competition and an abundance of cash.

    To watch the video, click the player below:



    On top of the company announcing superb operating results, a highlight of Apple's recent quarter was the company's ability to generate even more cash and compile a healthy balance of cash and short-tem investments (taken together as "cash") of $24.5 billion. This equates to $27 per share in cash. With a current stock price of around $107 per share, nearly 24% of Apple's market capitalization is represented by its cash.

    Now let's find other companies with strong Apple-like balance sheets.

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