## Figure 1.8. United States: Corporate Internal Funds and External Sources of Finance

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**Canonical URL:** [Figure 1.8. United States: Corporate Internal Funds and External Sources of Finance](https://www.imf.org/-/media/files/publications/gfsr/2017/april/chapter-1/figure1-8.pdf)

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### 1. Corporate Cash Holdings on Balance Sheet
- Headline figure: $7.8 trillion
- Chart axis ticks presented: –4, –2, 0, 2, 4, 6, 8, 10, 12 and years 1980 84 88 92 96 2000 04 08 12 16
- Caption: Corporate cash holdings are tapering ...

### 2. Corporate Profits
- Headline axis label: (Percent of GDP)
- Chart axis ticks presented: –$3.0 trillion and secondary axis ticks –25, –20, –15, –10, –5, 0, 5, 10, 15, 20, 25 and years 0 20 40 60 80 100 120 140 2000 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
- Caption: ... as profits recede from a high level.

### 3. Corporate Liabilities and Net Equity Issuance
- Headline axis label: (Percent of assets)
- Chart axis ticks presented: –2, –1, 0, 1, 2, 3, 4, 5, 6 and years 2017 18 19 20 21 22
- Finding: Net equity financing has been falling the past four decades, as debt finance has continued to rise.
- Additional note in figure: Negative net equity issuance (gross issuance minus share buybacks); Increase in debt and other liabilities.

### 4. Bank Equities and Corporate Lending
- Series and scales shown:
  - S&P 500 bank stocks (price index, right scale)
  - Lending to nonfinancial corporate firms (year-over-year percent change, left scale)
- Chart axis ticks presented: 0, 100, 200, 300 and 10, 15, 20, 25, 30 and years 2000 02 04 06 08 10 12 14 16
- Finding: A sharp improvement in bank equity valuations may portend stronger willingness to lend.
- Note: In panel 4, the series for lending is lagged 12 months.

### 5. Corporate Sector Gross Equity Issuance
- Headline axis label: (Billions of U.S. dollars, unless otherwise stated)
- Chart axis ticks presented: 6, 7, 8, 9, 10, 11, 12, 13 and years 1960 70 80 90 2000
- Observation: Gross equity issuance has abated, despite favorable valuations ...

### 6. Illustrative Impacts of Improving Equity Sentiment
- Headline axis label: (Percent deviation from baseline)
- Chart axis ticks presented: 0.0, 0.2, 0.4, 0.6, 0.8, 1.0, 1.2, 1.4, 1.6, 1.8, 2.0, 2.5, 3.0, 3.5, 4.0, 4.5, 5.0 and years 1980 84 88 92 96 2000 04 08 12 16
- Caption: ... while a lower cost of equity capital could boost business investment (and, eventually, debt).
- Modeling assumptions shown in figure notes:
  - Bank balance sheet improvements are modeled using an equivalent decrease in the share of bank capital devoted to lending, phased in over five years.
  - Equity risk premium compression consists of a 10 percent increase in the real equity price, phased in over one year.

### Additional labels and notes visible in the figure
- Sector legend items: Energy, Real estate, Utilities, Information technology, Health care, Other
- Index/ratio label: S&P 500 P/E (multiple, right scale)
- Time labels and recession shading: Shaded areas represent economic recessions.
- Abbreviations: P/E = price-to-earnings ratio.

*Sources: Bloomberg L.P.; Dealogic; Federal Reserve; Morgan Stanley Capital International; Standard and Poor’s (S&P); Vitek 2017; and IMF staff estimates.*

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_Source: https://www.imf.org/-/media/files/publications/gfsr/2017/april/chapter-1/figure1-8.pdf_