November 29, 2022

AFP January 2022 CCI® results found U.S. organizations anticipate that during Q1 they will build cash at a slower pace than they did past quarter.

BETHESDA, Md., Jan. 31, 2022 /PRNewswire/ — During the fourth quarter of 2021, U.S. organizations continued to build cash and short-term investment holdings at a similar pace to the previous quarter and year. These findings are from the AFP Corporate Cash Indicators® (CCI), a quarterly survey of senior corporate treasury and finance executives conducted by the Association for Financial Professionals (AFP) and underwritten by Allspring Global Investments. The latest CCI’s quarter-over-quarter index reading decreased 4 points to +17, and the year-over-year indicator increased by 4 points to +25.

(PRNewsfoto/AFP)

Though business leaders indicate they plan to build cash reserves during Q1, they anticipate doing so at a more gradual pace than they did last quarter, signaling muted optimism as they plan for early 2022. The forward-looking indicator measuring expectations for changes in cash holdings in the first quarter of this year, decreased 16 points from a reading of +18 to +2. A significant share of companies attributes the expected increase in cash holdings during this quarter to improved business performance. Practitioners whose organizations are expecting to decrease cash and short-term investments during the current quarter indicate they are deploying cash primarily to grow their business.

These results are based on 95 responses from senior treasury and finance professionals this quarter.

“Business leaders continue to grapple with challenges facing the economy, including a resurgence of the coronavirus pandemic in the wake of Omicron,” said Jim Kaitz, president and CEO of AFP. “That said, it is encouraging to see the flashes of optimism among treasury and finance professionals who have reported improved company performance, with some even being in a position to invest in their organizations.”

“2022 is promising to be a complex year on many fronts for treasury and financial professionals. With the Fed looking to normalize rates, new SEC proposed amendments to money market funds, and the ongoing challenges of the pandemic, liquidity and proactive cash management remain a top priority for investors,” Yeng Butler, Head of Investment Solutions and Liquidity Client Group, Allspring. “We are encouraged by the latest CCI survey results and optimistic that many organizations will continue to see improved business performance.”

January 2022 AFP Corporate Cash Indicators®

Change in cash and short-term investment holdings in the past quarter: 4Q21 v. 3Q21 = +17

Change in cash and short-term investment holdings over the past year: 4Q21 v. 4Q20 = +25

Expected change in cash holdings during 1Q22 = +2

Aggressiveness of short-term investments = +2

The indicators measure recent and anticipated changes in corporate cash balances by calculating increase percentage minus decrease percentage.

Each quarter, AFP asks select members representing a broad cross section of U.S. businesses the same questions: whether their company’s short-term holdings increased or decreased in the past year and past quarter; whether investment selections for those holdings changed; and whether they expect cash holdings to increase or decrease in the coming quarter. AFP member companies have agreed to participate in this ongoing study on a long-term basis.

Participants manage their companies’ cash and short-term investment portfolios and are fully aware of their companies’ liquidity needs and business strategies. Since corporate decisions to grow/shrink the size of cash and short-term investment portfolios reflect their business outlook and direction, changes reported by this broad group of companies are indicators of economic activity.

AFP began collecting quarterly data in January 2011, and has now collected 45 data sets. See www.afponline.org/CCI for answers to frequently asked questions. The next set is slated to be published April 25, 2022. For press queries, please contact Melissa Rawak, AFP managing director, at [email protected]

About the Association for Financial Professionals® (AFP)
Headquartered outside of Washington, D.C., and located regionally in Singapore, the Association for Financial Professionals (AFP) is the professional society committed to advancing the success of treasury and finance members and their organizations. AFP established and administers the Certified Treasury Professional and Certified Corporate FP&A Professional credentials, which set standards of excellence in treasury and finance. On the web: afponline.org.

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SOURCE Association for Financial Professionals (AFP)

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