AFP Corporate Cash Indicators®

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January 2020 Results:

U.S. businesses continued to accumulate cash and short-term investment holdings at a fast pace in the last quarter of 2019. The quarter-over-quarter index increased twenty-two points to +31, and the year-over-year indicator increased by thirteen points to +33. These readings suggest that treasury and finance professionals are even more uncertain about the economy and are exhibiting caution.

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AFP Corporate Cash IndicatorsJan 20Oct 19July 19Apr 19
Change in Cash Holdings (Over the Past Quarter)+31+9+8+3
Change in Cash Holdings (Over the Past Year)+33+20+11+13
Expected Change in Cash Holdings (During Current Quarter)-3+16+12+10

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Press Release:

Study: Cash Accumulation Spiked in Fourth Quarter of 2019

How to read the results:

The indicators measure recent and anticipated changes in corporate cash balances by calculating the percentage of survey respondents reporting an increase (or expected increase) in cash holdings minus the percentage reporting a decline (or expected decline). Declining indicators are indicative of increasingly confident businesses. Conversely, rising indicators suggest growing pessimism.  

Why you should care about corporate cash holdings and the AFP Corporate Cash Indicators?

The reason is simple: all other things held constant, optimistic companies are more likely to deploy their cash holdings. Confident companies use their cash to make growth-orientated expenditures (e.g., increased capital expenditures, merger & acquisitions and hiring) and to increase dividend payouts and share repurchases. Conversely, pessimistic executives are likely to retain their cash holdings. 

The AFP Corporate Cash Indicators (AFP CCI), provide treasury and finance professionals, policymakers and market analysts with timely data on a determinant of economic activity: corporate cash levels. 

About the AFP Corporate Cash Indicators

AFP Corporate Cash Indicators is a trademark of the Association for Financial Professionals. All AFP Corporate Cash Indicators® survey questions, data and reports are the copyrights of the Association for Financial Professionals, and all rights are reserved. For information about including the AFP CCI on your site, please contact pr@afponline.org.