Forty percent of organizations reported holding a larger US cash and short-term equivalent balance in May 2006 than six months earlier, according to an AFP press release on the survey. In addition, treasurers and other financial professionals surveyed expect that their organizations will maintain their US cash balances over the next 12 months.
More than a quarter (27%) of respondents expect to hold larger cash balances, while nearly half (49%) expect to maintain their cash balances in the next 12 months, the release said.
“The amount of cash and cash equivalents a company keeps on hand can be seen as a barometer of how corporations view the economic climate and the opportunities they perceive for investing in new projects or acquisitions,” said AFP’s Director of Treasury Services Jeff Glenzer, in the release.
Additional survey findings include:
- One-in-five organizations have no written rules governing investment selection and most organizations are far less diversified than their policies allow.
- There is a trend toward seeking greater efficiency in cash management, including the use of outside advisors. A quarter of organizations use an outside investment manager to administer some portion of its short-term portfolio.