AFP Corporate Cash Indicators®

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July 2021 Results:

U.S. businesses continued to accumulate cash and short-term investment holdings during the second quarter of 2021 at a higher pace than previous quarters. The quarter-over-quarter index increased thirty-seven points to +43, the highest this index has been since we started the CCI Survey in 2011. The year-over-year indicator increased by twenty-four points to +45, and the forward-looking indicator increased 7 points from last quarter’s reading of +1 to +8. Thirty-four percent of companies plan to increase their current cash holdings in the third 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 IndicatorsJuly 21April 21January 21October 20
Change in Cash Holdings (Over the Past Quarter)+43+6+39+19
Change in Cash Holdings (Over the Past Year)+45+22+29+24
Expected Change in Cash Holdings (During Current Quarter)+8+1+16-4

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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.