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Finance Series: corporate-finance

How They Spend It - A study of corporate cash levels and spending behaviour

This research examines Corporate Cash Holdings, Corporates' Spending Patterns and Optimal Spending Strategies, using all non-financial and non-utility companies listed on the London Stock Exchange at any point in time between 1996 and 2010 as a study sample.

During times of turmoil in European financial markets, retention and immediate availability of cash reserves have functioned as a safety net. However, was the cash at companies' disposal in excess of the so-called 'sufficient cash level'? How do companies tend to spend this 'excess cash', and which spending strategy has the potential to generate the highest returns for shareholders? The M&A Research Centre (MARC) at Cass Business School has, in collaboration with its senior sponsors, Credit Suisse and Ernst & Young, performed an in-depth analysis of a) the factors which determine the cash levels which companies need to keep at hand, b) the spending habits of corporates and c) the cash disposal strategies which are most successful.

The full published report can be downloaded here at the MARC section of the Cass Business School website. A short registration form must be completed.

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