Search
 

Companies Ready to Spend

Survey indicates companies that have been hoarding cash may start spending it this year.

By Treasury & Risk Staff | Updated on February 05, 2015

The AFP Corporate Cash Indicators index from the Association for Financial Professionals (AFP) indicates that companies are getting ready to deploy the cash reserves they’ve built up since the start of the recession. In July 2014, 10 percent more companies were planning to increase their cash holdings over the next quarter than were planning to decrease their cash holdings. In October 2014, the balance had shifted; 3 percent more companies expected to reduce cash than to increase it. By last month, that number had jumped to 14 percent.

Each quarter, the AFP surveys corporate finance professionals about trends in their cash management and short-term investing. Among other questions, it asks “During the current quarter, do you expect your organization will increase, decrease, or maintain its current cash and short-term investment holdings?” In the survey conducted in early January, 20 percent of respondents said they expect to expand their cash and short-term investment balances over the next quarter, while 33 percent said they expect to reduce those balances. After rounding, this puts the January Corporate Cash Indicators index, calculated as the proportion of companies that expect to increase cash minus the proportion that expect to decrease it, at -14. A year ago, slightly more companies expected to spend cash than to stockpile it; the index was -1 in January 2014. The January 2015 reading of -14 is the lowest the AFP has ever calculated.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper

Recommended Stories

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2024 ALM Global, LLC. All Rights Reserved.