US Corporate Treasurers Moderate Cash Hoarding in Q212, Trend to Continue

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
AFP EconWatch newsletter


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