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Gosh, where do I spend all this cash ?

Updated: Aug 5, 2022

In previous posts, we have drawn attention to the increasing cash buildup by corporates and according to the latest Association of Financial Professionals (America) ("AFP"), the trend continues unabated.

"....During the second quarter of 2021, U.S. businesses continued to build their cash and short-term investments at a significantly higher rate than the previous quarter.....

The year-over-year indicator increased by 24 points from +21 to +45, indicating a faster pace of cash accumulation than a year ago. A year ago, organizations were struggling with their cash flow and were compelled to disburse their cash holdings to remain viable. They are now in a stronger financial position and holding onto their cash and short-term holdings to safeguard against future uncertainty.

56 percent of organizations held larger cash and short-term investment balances at the end of Q2 2021 than they did at the end of Q1 2021, while 13 percent reduced cash holdings in the past three months."

The first three questions are:

• Over the past quarter, did your organization’s cash and short-term investment holdings increase, decrease or remain the same?

• Over the past year, did your organization's short-term holdings increase, decrease or remain the same?

• During the current quarter, do you expect your organization will increase, decrease or maintain its current cash and short-term investment holdings?

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