Corporate Cash Indicators

U.S. Firms Are Worried About the Economy, Building Reserves at a Record Pace

Survey: Companies accumulated cash reserves at a much higher rate than anticipated

BETHESDA, Md., Oct. 30, 2017 /PRNewswire/ — The AFP Corporate Cash Indicators® index, recording changes in cash and short-term investments over the past quarter, shot to its highest reading since it debuted in January 2011, signaling that corporate treasury and finance executives are increasingly concerned about the global economy and are stockpiling cash reserves in response.

In the latest CCI, a quarterly survey of corporate treasury and finance executives conducted by the Association for Financial Professionals, American businesses accumulated cash and short-term investments holdings at a breakneck pace in the third quarter of 2017. The quarter-over-quarter index jumped 9 points to +25, and the year-over-year indicator increased two points to +20. Respondents to the previous CCI had indicated they would accumulate cash in 3Q17, but they actually did so at a much higher rate than anticipated.

Respondents also anticipate cash accumulation will accelerate through the fourth quarter; the forward-looking indicator measuring expectations for changes in cash holdings in the current quarter increased five points from +8 to +13.

More results from the 3Q17 CCI:

  • 42 percent of organizations held larger cash and short-term investment balances at the end of Q3 2017 than they did at the end of Q2 2017
  • 31 percent of organizations anticipate expanding cash and short-term investment balances over the next three months
  • 9 percent of organizations were more aggressive with their short-term investments in Q3 2017

The results of the October 2017 CCI are based on 113 responses from senior treasury and finance professionals

“Treasury and finance executives are clearly concerned over uncertainty in the domestic and global economy,” said Jim Kaitz, president and chief executive of AFP. “In response, they are performing their primary role as safe-keeper of corporate cash, keeping their powder dry until they see a more optimistic economic landscape.”

October 2017 AFP Corporate Cash Indicators®

  • Change in short-term investment holdings: 3Q17 v. 2Q17 = +25
  • Change in cash holdings: 3Q17 v. 2Q17 = +20
  • Expected change in cash holdings during 4Q2017 = +13
  • Aggressiveness of short-term investments 3Q = +5

See for answers to frequently asked questions. The next set is slated to be published January 29, 2018. Click here for more data on the CCI.

The indicators measure recent and anticipated changes in corporate cash balances by calculating increase percentage minus decrease percentage.

Treasury and finance executives are clearly concerned over uncertainty in the domestic and global economy

Each quarter, AFP asks select members representing a broad cross section of U.S. businesses the same questions: whether their company’s short-term holdings increased or decreased in the past year and past quarter; whether investment selections for those holdings changed; and whether they expect cash holdings to increase or decrease in the coming quarter.

Participants manage their companies’ cash and short-term investment portfolios and are fully aware of their companies’ liquidity needs and business strategies. Since corporate decisions to grow/shrink the size of cash and short-term investment portfolios reflect their business outlook and direction, changes reported by this broad group of companies are indicators of economic activity.




About AFP®
Headquartered outside Washington, D.C., the Association for Financial Professionals (AFP) is the professional society committed to advancing the success of its members and their organizations. AFP established and administers the Certified Treasury Professional and Certified Corporate FP&A Professional credentials, which set standards of excellence in finance. Each year, AFP hosts the largest networking conference worldwide for over 6,500 corporate finance professionals.
SOURCE Association for Financial Professionals