Investor Sentiment

A Balance Sheet to Die For

By, 01/23/2007

Have a look at the balance sheet below. Looks pretty good, right? Debt is less than 20% of total assets, and liquid assets are over 60% of total assets. This is a balance sheet most corporations would die for—a tremendously healthy capital structure that's clearly generated substantial assets over time while maintaining a near optimal, if not under-leveraged, amount of debt. (See our past commentary, "Are You Optimal?") Certainly, if you were an investor and saw a balance sheet like this, you'd be impressed, right? This balance sheet tells a story of an entity with big potential for further investment and growth with excess capital to deploy and could easily service more debt.

This not a company's balance sheet. This is the balance sheet of the US Consumer. With over $67 trillion in assets compared to just $13 trillion in debt, the US consumer has a net worth of over $54 trillion and growing.

If this is "broke," then we have no idea what it means to be rich.


*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.

Click here to rate this article:



*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.

Subscribe

Get a weekly roundup of our market insights.Sign up for the MarketMinder email newsletter. Learn more.