Like their counterparts in many other parts of the world Korean businesses are holding on to their cash.
As of September the average reserve ratio of listed companies here in Korea exceeded 700 percent.
This means that the amount of retained earnings and capital surplus put together is more than seven times larger than a company’s paid-in capital.
According to the Korea Exchange and the Korea Listed Companies Association on Tuesday, the average reserve ratio of 553 businesses in the nation stood at 721.6 percent in September, which is nearly a 23 percentage point increase from three months earlier.
Experts explain if a company’s reserve ratio is high, it shows that the business has a strong financial structure and is holding on to its cash reserves instead of using it for investment or paying dividends to its shareholders.

NOV 30, 2010

 
Reporter : jjeoh@arirang.co.kr