Thursday, September 22, 2022

Since cash is king, the data nerds at Calcbench decided the other day to answer a quick question: How much cash is coming into the coffers for S&P 500 companies lately?

The chart below suggests that so far this year, cash is actually leaving those coffers. It shows the average increase in cash for S&P 500 firms since the start of 2017.

The story is fairly clear. Prior to the pandemic, cash see-sawed from one quarter to the next, generally in a downward direction. Then came that gigantic spike in early 2020, when the pandemic struck and companies raced to secure as much cash as possible. The average cash increase in Q1 2020 was $1.56 billion.

Since then the downward trend has resumed, but in a more pronounced direction — and in a much more downward direction since the start of this year.

Obvious question: why?

We can posit part of the answer right away. Once everyone realized in latter 2020 that economic collapse wasn’t imminent, firms felt more comfortable spending down the piles of cash they secured at the start of that year.

The arrival of inflation in 2022, however, poses more questions. Since interest rates are rising, are some firms avoiding cash from finance activities? Since costs are rising, is cash from operating activities falling because companies were paying higher input costs before they could pass along those higher prices to customers?

Our chart above is just meant to raise those questions; it can’t provide answers unto itself. But if questions about cash flows are on your mind as an analyst, Calcbench does have that data in spades. We built the above chart simply by going to our Bulk Data Query page, which has 19 separate cash flow metrics one can pull.

Among those individual metrics are many relating to operating, financing, and investing activities; and you can study them for large groups of firms in aggregate, or large groups of firms each listed individually.

Our particular chart took about two minutes to build. Whatever analytical adventure you want to choose, we have the data for that too!

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