Cash is constantly flowing in and out of companies.

Public companies have five basic uses for the cash they bring in: 1) share buybacks; 2) dividends; 3) acquisitions; 4) research and development; and 5) capital expenditures, which include spending on both growth and maintenance.

"This year companies continued to invest for growth, boosted by a sharp increase in cash M&A," Goldman Sachs' David Kostin observed. "However, the increase in acquisitions was offset by an overall decline in capital spending, due to the collapse in oil prices. Returning cash to shareholders through buybacks and dividends remained a popular corporate strategy as sluggish economic growth and low equity market returns have persisted in 2015."

Indeed, while buybacks and dividends are arguably prudent capital-allocation decisions in a slow-growth environment, it's also a controversial one as it doesn't come with the economic oomph of capex and R&D.

Kostin expects capex to remain lackluster as the energy sector, which accounts for 30% of capex, is expected to see spending fall 20% in 2016 because of low energy prices. This will be offset by an estimated 6% gain in non-energy capex.

"We forecast S&P 500 firms will spend $2.2 trillion next year, allocating 54% to investing for growth (capex, R&D, and M&A) and 46% to returning cash to shareholders (buybacks and dividends)," Kostin said. "Cash balances remain at historical highs, totaling $1.5 trillion (ex-Financials) or 11% of assets."

Here's a chart breaking down cash use since 1999.

(Goldman Sachs)

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