AFP Corporate Cash Indicators®

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October 2018 Results:

U.S. companies continued to build cash reserves in the third quarter of 2018, and at a slightly faster pace than they did in the previous quarter. The forward-looking indicator, measuring expectations for changes in cash holdings in the fourth quarter, increased four points from their predictions last quarter to a reading of +7, suggesting they plan to build their cash reserves. Concerns over rising interest rates generating higher borrowing costs, as well as uncertainty over the upcoming midterm election, prodded finance executives to accumulate cash, according to the latest AFP Corporate Cash Indicators® (CCI).

AFP thanks BMO for underwriting the 2018 October CCI Survey.

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AFP Corporate Cash IndicatorsOct 18July 18Apr 18Jan 18
Change in Cash Holdings (Over the Past Quarter)+8+5+18+15
Change in Cash Holdings (Over the Past Year)+7+16+17+23
Expected Change in Cash Holdings (During Current Quarter)+7+3-1-1

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Press Release:

Study: U.S. Firms Accumulated Cash in 3Q18 At A Faster Pace Than The Previous Quarter

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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.