US investment-grade company liquidity increases in Q2 2025

Cash positions for the highest-rated US companies improved in the second quarter, according to the latest S&P Global Market Intelligence data.

The median cash ratio, which measures cash and equivalents as a percentage of total liabilities, increased quarter over quarter by 1.16 percentage points to 21% for companies rated BBB- or higher by S&P Global Ratings. The metric, calculated quarterly from publicly disclosed corporate balance sheets, reflects a company's ability to pay short-term debt using cash and other liquid assets.

For non-investment-grade companies, the median cash ratio fell to 28% from 28.85% during the first quarter.

Borrowing costs are likely to fall in the near term as the US Federal Reserve is set to push its first rate cut since late 2024. Shorter-dated Treasury yields have fallen in recent days, with the 1-year yield — a reference point for short-term debt interest rates — falling by nearly 50 basis points from its summertime peak.

Sectors

Median cash ratios improved across seven of 11 market sectors for investment-grade companies, with the sharpest rise recorded for communication services, up 5.13 percentage points to 30.47%.

Ratios fell for investment-grade companies in the financials, information technology, industrials and utilities sectors. IT companies recorded the widest fall in their median cash ratio, dropping 2.49 percentage points to 38.31%.

For non-investment-grade companies, four sectors reported an improvement in median cash position: healthcare, real estate, communication services and materials. Real estate companies reported the largest jump, with the median cash ratio for non-investment-grade companies jumping 52.05 percentage points to 80.34%.

The largest drop among median cash ratios for lower-rated companies during the quarter was in the IT sector with an 8.83-percentage-point fall.