AFP Corporate Cash Indicators®
April 2016 Results: Strong job numbers and signs of stability in the domestic economy instilled some confidence among business leaders in the U.S. and they began to deploy some of their cash in the early months of 2016. However, they plan to reverse their actions during the second quarter and build their cash holdings.
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Press Release: U.S. Firms Deployed Some Cash in First Quarter, But Will Resume Accumulating This Quarter
| AFP Corporate Cash Indicators
|Change in Cash Holdings (Over the Past Quarter)
|Change in Cash Holdings (Over the Past Year)
|Expected Change in Cash Holdings
(During Current Quarter)
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?
About 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.
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