AFP Corporate Cash Indicators®

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January 2017 Results:

During the last quarter of 2016, U.S. businesses continued to build their cash reserves, though at a slightly slower pace than the previous quarter. In the first quarter of 2017, business leaders appear to be willing to loosen their purse strings meaningfully for the first time since January 2015. Short-term investment aggressiveness increased slightly from last quarter, but still signaled a conservative posture with cash and short-term investments.

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AFP Corporate Cash IndicatorsJan 17Oct 16Jul 16 Apr 16
Change in Cash Holdings (Over the Past Quarter)+16+19+8-1
Change in Cash Holdings (Over the Past Year)+19+21+14+10
Expected Change in Cash Holdings (During Current Quarter)-7+4+16+7

 Jan2017CCIChart

Press Release:

U.S. Firms Expect Economic Growth in 2017 and Plan to Deploy Cash

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.