Corporate canada likes cash — a lot of it. Case in point: over the past decade, it has almost doubled its cash holdings as a proportion of total assets.

At the same time, corporate Canada has cut the proportion of its resources allocated to inventories and accounts receivable. As part of this process, it has cut debt as a proportion of assets and boosted the proportion of equity.

The message is plain and clear: Canadian businesses have strengthened their collective balance sheet.

These results come from analysis of Statistics Canada’s reports on the financial results of non-financial corporations. Comparisons are between the fourth quarter of 1999 and the third quarter of 2011, which is the latest data available.

In that span, total assets of non-financial corporations increased by 81%, to $3.3 trillion. And annual revenue gained by 58% from 1999 to the 12 months ended Sept. 30, 2011.

Cash accounted for 7.4% of assets in the latest period vs 4.1% at yearend 1999. Corporate Canada cut other working capital items: accounts receivable to 10.7% of assets from 11.3%, and inventories to 8.1% of assets from 10%.

Compared with the 81% increase in total assets from 1999, cash grew by 228%, receivables increased by 71% and inventories rose by 47%.

On the current liability side of the balance sheet, accounts payable dropped to 12.1% of assets from 13.8%.

There is much variation in these figures among industries. Manufacturing — the largest industry by assets, shareholders’ equity and revenue — grew its assets by 62% in the decade. Twelve-month operating revenue gained by only 12%. Its cash as a proportion of assets increased to 4.4% from 4%. Equity dropped to 44.1% of assets from 47.4%.

Oil and gas, the second-largest industry category in StatsCan’s reporting, shows its strong growth emphatically. Total assets jumped by 270% and 12-month operating revenue gained by 151%.

The oil and gas industry cut its dependence on debt to 17.6% of assets, down from 33%. In 1999, cash accounted for only 0.9% of total assets. This rose to 3.8% in Q3 2011.

StatsCan treats real estate as a non-financial industry (but in the S&P/TSX GICS index, it is in the financial sector), and it stands third in size. Its cash increased to 7.4% of assets from 3.3%. Total debt dropped to 44.3% of assets from 48.8%.

For all non-financial industries, the big increases in cash took place in 2004 (maximum year-to-year increase of 35%) and again in 2009 (the maximum increase was 24%). Cash in Q3 2011 was 3.2% above the year-before amount.

Ratios of inventories, accounts receivable and accounts payable have declined as a proportion of assets since the first quarter of 2002. At that point, the rise in cash holdings had already started.

Cutting debt has been a significant trend. Mining, one of the capital-intensive industries, had the least reliance on debt in 2011, at 9.8% of assets.  IE