AFP Corporate Cash Indicators®

RSCH-21_CCI-Apr-PgHdr

October 2021 Results:

During the third quarter of 2021, business leaders continued to build cash and short-term investment holdings but at a slower rate than the previous quarter. The quarter-over-quarter index decreased twenty-two points to +21, and the year-over-year indicator too decreased by twenty-four points to +21. The forward-looking indicator increased 10 points from last quarter’s reading of +8 to +18. Thirty-nine percent of companies plan to increase their current cash holding in the fourth quarter of 2021, and the primary reason driving this increase is improved business performance.

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Read the accompanying press release here and review the interactive findings here.

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AFP Corporate Cash IndicatorsOctober 21July 21April 21January 21
Change in Cash Holdings (Over the Past Quarter)+21+43+6+39
Change in Cash Holdings (Over the Past Year)+21+45+22+29
Expected Change in Cash Holdings (During Current Quarter)+18+8+1+16

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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.