Companies have increased their cash and short-term investment balances in Q212, according to the AFP Corporate Cash Indicators (AFP CCI), a quarterly study that measures recent and anticipated changes in US corporate cash balances. Quarter-to-quarter, 38% of reporting organisations had greater cash balances at the end of Q212 than they had at the end of Q112, compared with 29% that shed cash during the period.
The difference, a net index reading of +10, was down three points from the March 2012 survey and off 14 points from six months earlier.
Year-over-year, cash hoarding increased, with 40% of companies reporting larger balances at the end of Q212 than they had at the end of the Q211, with a resulting net index reading of +15, up two points from the April 2012 survey.
Over the next three months, treasurers expect the growth in corporate cash balances to continue to slow, with only 31% of organisations anticipating a build-up of cash reserves and 27% expecting to reduce balances. The net index reading of +4 is down four points from the April 2012 survey and 13 points from a year earlier.
AFP began collecting quarterly data in January 2011 and has now collected six data sets. The next set will be published in the 15 October 2012 issue of
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