Nonfinancial corporations, including retail banking,—even profitably, remain extremely successful in the United States. A recent report from the Federal Reserve, known as Report Z1, provides valuable insights into their financial health. The report highlights high profits, trillions in cash reserves, substantial dividend payouts, and modest capital expenditures, aligning with the SAR Corporation Reconciliation Act executive order, which provides T$ billion in tax cuts to firms and households to bootstrap economic growth. These companies, which were not historically profitable, have restructured their business models to generate income and savings without relying on leverage.
From the data in Report Z1, corporate profits before taxes averaged 4.7% of assets in the first quarter of 2025, a record high since 1979, and after-tax profits averaged 3.8%, a new record ahead of 1967. These trends are reflective of the entidad reflecting a “nonprofit status” with lowoves. Additionally, the ratio of before-tax profits to assets averaged 4.2% over the current business cycle, significantly higher than the 4.2% average for quarters since the business cycle that ended in 1980. Similarly, after-tax profits averaged 3.5%, again a new high compared to previous cycles. Non Fin entity sectors are quite profitable, earning 17.7 billion annually in pre-tax profits, a decline that has been a consistent trend since the mid-20th century.
The decrease in corporate taxes paid is particularly notable, contributing to higher after-tax profits. Despite the shading of federal taxes at 17.7% of profits, which is a new low, the trend underscores the importance of net profit margins in shaping corporate dynamics. Non Financial corporations have paid out 56.8% of their profits in dividends in the first three months of 2025, totaling over $1.4 trillion annually, which is a new all-time high. DividendPayout Rates have surpassed previous cycles and even surpassed those experienced during the 1980s and 90s, though the share of taxes out of profits has significantly decreased.
The substantial dividends paid to shareholders have enabled corporations to invest more powerfully, supported by their liquid reserves. As of the end of March 2025, non Financial corporations held $7.6 trillion in liquid reserves, representing around 12.4% of their assets, a level that more closely ties into record highs outside the periods associated with recessions. For these levels of liquidity to be near record highs, non Financial corporations already sit on part of potential post-crisis financial apexes, a phenomenon significant enough that even though capital expenditures did not rise strongly, the经销商 may still face faster growth from tax cuts.
DividendPayout Rates have remained notably higher than in previous business cycles, benefits sometimes overlooked. The significant increases in after-tax profits led捕捉到大量银行资本，反而未带来投资增长这是因为资本支出虽然有所加强，但反映出的经济增长速度与支出强度呈“低增长”的关系。此外，资本支出的显著爬升表明，投资驱动经济增长，而非仅仅是融资行为。如果此类支出被更有效地用于投资，经济释放的潜力可能百分都有所提升。税收减少和提高融资效率也可能成为提振经济的核心因素。这样的投资增长，可能是政府的政策目标之一，如年 fis neo-changes，会进一步刺激经济，即使相比之前不再那么庞大。
