The AFP Corporate Cash Indicators index from the Association forFinancial Professionals (AFP) indicates that companies are gettingready to deploy the cash reserves they've built up since the start of therecession. In July 2014, 10 percent more companies were planning toincrease their cash holdings over the next quarter than wereplanning to decrease their cash holdings. In October 2014, thebalance had shifted; 3 percent more companies expected to reducecash than to increase it. By last month, that number had jumped to14 percent.

Each quarter, the AFP surveys corporate finance professionalsabout trends in their cash management and short-term investing.Among other questions, it asks “During the current quarter, do youexpect your organization will increase, decrease, or maintain itscurrent cash and short-term investment holdings?” In the surveyconducted in early January, 20 percent of respondents said theyexpect to expand their cash and short-term investment balances overthe next quarter, while 33 percent said they expect to reduce thosebalances. After rounding, this puts the January Corporate CashIndicators index, calculated as the proportion of companies thatexpect to increase cash minus the proportion that expect todecrease it, at -14. A year ago, slightly more companies expectedto spend cash than to stockpile it; the index was -1 in January2014. The January 2015 reading of -14 is the lowest the AFP hasever calculated.

This represents a notable shift, after companies continued to hoard cash throughout 2014. When asked whethertheir organization's cash and short-term investments increased,decreased, or remained the same over the fourth quarter of 2014, 39percent said they increased and 26 percent said they decreased.When asked whether short-term holdings had changed over the prioryear, 35 percent said they had increased and 26 percent said theyhad decreased.

The survey also revealed that in the last quarter of 2014, thevast majority of companies made no changes to their strategies forselecting short-term investments. But among those that did changecourse, 6 percent became more aggressive in their investmentselection, while only 1 percent became more conservative.