Companies Ready to Deploy Cash in 2012: Deloitte

NEW YORK, Jan. 25, 2012 /PRNewswire/ -- Nearly half (41 percent) of companies plan to deploy cash reserves in the new year, according to a recent Deloitte poll of business professionals from a cross section of industries.  Respondents also suggest that their companies are likely to execute acquisitions (28.2 percent), increase capital budgets (20.6 percent), repurchase shares (11.8 percent) or issue one-time dividends or increase dividends (6.1 percent) in 2012.

"The good news is that cash balances have risen to historic levels, balance sheets are strong and companies have options," says Justin Silber, principal, Deloitte Financial Advisory Services LLP.  "The bad news is that literally trillions of dollars in corporate cash reserves aren't earning much - if any - return as interest rates remain at historic lows.  In the meantime, investors want immediate cash return while looking for boards to defend against market volatility."

Silber continues, "The C-suite thinks growth through acquisition is ideal but division heads believe R&D investments are key.  Each internal corporate group can add value, but first shared criteria should be reached so that strategies to retain, return or deploy cash are more likely to succeed."

Poll participants cite lack of attractive alternatives for deploying cash (34.3 percent), no common framework, tools and metrics to evaluate alternatives (13.6 percent), and siloed decision making (12.1 percent) as the biggest challenges in executing cash deployment strategies at their organizations.

"We keep hearing from companies that they're struggling to develop a shared framework and level playing field through which multiple teams can work together to determine the best use for cash reserves in the new year," says Silber.  "Getting your strategic house in order for cash reserve deployment should be the top resolution for corporate leadership teams in 2012."

About the online poll
More than 1,000 professionals from the financial services; consumer and industrial products; technology, media and telecommunications; banking and securities; and, energy and resources industries responded to the polling questions during the webcast, "Capitalizing on Cash: Evaluating Options for Increased Shareholder Value." To review the full responses, click here (http://www.deloitte.com/view/en_US/us/Services/Financial-Advisory-Services/01f1f777295f4310VgnVCM2000001b56f00aRCRD.htm).

As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.  Certain services may not be available to attest clients under the rules and regulations of public accounting.

SOURCE Deloitte