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Cash Deployment on the Rise

Each quarter, AFP asks senior treasury and finance professionals about their company’s cash holdings. According to the latest CCI, companies are increasingly tapping into their cash reserves. More than a third of the 156 survey respondents said they plan to reduce their holdings in the coming quarter, while 28% did so in Q2.


Source: Association for Financial Professionals

Cash Accumulation

While more organizations accumulated cash than decreased it in Q2 — 48% to be exact — most did so as a defensive measure. The quarter-over-quarter index reading was +20, while the year-over-year indicator was +29.

展望未来,现金积累可能是decline over the summer, as only about 24% of businesses indicated that they would be adding to their cash reserves in Q3. Those planning to amass more cash are doing so to guard against what they anticipate will be very challenging months. On a slightly encouraging note, about 46% of the companies that are planning to build cash in Q3 said they are doing so due to improved business performance.

If organizations are using cash holdings to stay afloat, it will likely be quite a while before we see any signs of treasury and finance leaders investing in their businesses.




Analysis and Economic Outlook


The effects of the pandemic have been truly devastating. Some industries, such as hospitality, were more severely impacted, but virtually all sectors saw an impact. If organizations are using cash holdings to stay afloat, it will likely be quite a while before we see any signs of treasury and finance leaders investing in their businesses.

Companies continue to look to their governments for assistance. In the U.S., the Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted as a response to the economic fallout. In the European Union, member states agreed to distribute funds to assist the bloc. But more government assistance will be needed around the globe as the crisis continues to take its toll on individuals and businesses.

金融专业人士无法确定what the next few months have in store for their organizations, creating a tremendous sense of unease. What we know for certain is that the next few months will be extremely challenging for businesses globally, and repercussions on most economies will be severe.

James A. Kaitz

President and CEO of Association for Financial Professionals @jkaitzafp.

Jim Kaitz是总裁兼首席执行官法新社, an association that represents over 16,000 treasury and financial professionals located around the world. He was formerly executive vice president and chief operating officer of Financial Executives Institute, a professional association of over 14,000 senior financial executives representing 8,000 companies in the United States.

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