Companies increased their cash and short-term investment balances in the third quarter, according to theAFP Corporate Cash Indicators(AFP CCI), a quarterly study that measures recent and anticipated changes in U.S. corporate cash balances. Quarter-to-quarter, 42 percent of reporting organizations had greater cash balances at the end of 3Q11 than they had at the end of 2Q11.

Meanwhile, companies reported that their investment selection for cash and short-term investments had become more conservative.

Year-over-year, cash hoarding had slowed a bit, with 41 percent holding larger balances at the end of 3Q11 than they had at the end of the 3Q10.

Looking ahead, 33 percent expect to further build cash and short-term investment balances during 4Q11 compared to 22 percent that expect to reduce balances.

AFP Corporate Cash Indicators
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+20 3Q11 v. 2Q11

+18 3Q11 v. 3Q10

+13 4Q11 expectations

"Increase" percentage minus "decrease" percentage

"Finance professionals in this environment are being asked to focus on conservative investments for corporate funding," saidJim Kaitz, AFP's president and CEO. "Further, companies were more likely to add to cash during the third quarter than they had during the first two quarters of 2011, but the pace of cash accumulation appears to be slowing when compared to the third quarter of 2010."