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000 C000000 0000707827
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001 A000000 PRINCOR CASH MANAGEMENT FUND, INC.
001 B000000 811-03585
001 C000000 5152475476
002 A000000 THE PRINCIPAL FINANCIAL GROUP
002 B000000 DES MOINES
002 C000000 IA
002 D010000 50392
002 D020000 0200
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022 A000001 HOUSEHOLD FINANCE CORP.
022 B000001 36-1239445
022 C000001 843459
022 D000001 4597
022 A000002 MERRILL LYNCH MONEY MAREKT
022 B000002 13-2761776
022 C000002 784727
022 D000002 0
022 A000003 LEHMAN BROTHERS
022 B000003 13-2501865
022 C000003 592153
022 D000003 4891
022 A000004 GOLDMAN SACHS MONEY MARKET
022 B000004 13-3160926
022 C000004 501562
022 D000004 8494
022 A000005 ASSOCIATES CORP. OF NORTH AMERICA
022 B000005 74-1494554
022 C000005 275928
022 D000005 0
022 A000006 GENERAL ELECTRIC CAPITAL CORP.
022 B000006 13-1500700
022 C000006 154155
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022 A000007 FORD MOTOR CREDIT CO.
022 B000007 38-1612444
022 C000007 132883
<PAGE> PAGE 2
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022 A000008 FIRST BOSTON CORP.
022 B000008 13-5659485
022 C000008 134639
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022 A000009 FIRST CHICAGO CAPITAL MARKETS
022 B000009 36-3595942
022 C000009 133636
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022 A000010 SEARS ROEBUCK ACCEPTANCE CORP.
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SIGNATURE A.S. FILEAN
TITLE VICE PRESIDENT
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 695,463,151
<INVESTMENTS-AT-VALUE> 695,463,151
<RECEIVABLES> 3,048,733
<ASSETS-OTHER> 19,872
<OTHER-ITEMS-ASSETS> 34,190
<TOTAL-ASSETS> 698,565,946
<PAYABLE-FOR-SECURITIES> 1,007,550
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 437,315
<TOTAL-LIABILITIES> 1,444,865
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 697,121,081
<SHARES-COMMON-STOCK> 694,962,013
<SHARES-COMMON-PRIOR> 623,864,278
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 697,121,081
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 38,198,478
<OTHER-INCOME> 0
<EXPENSES-NET> (4,581,415)
<NET-INVESTMENT-INCOME> 33,617,063
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (33,599,980)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,094,164,602
<NUMBER-OF-SHARES-REDEEMED> (3,056,436,126)
<SHARES-REINVESTED> 33,369,259
<NET-CHANGE-IN-ASSETS> 73,049,066
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,568,929
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,594,657
<AVERAGE-NET-ASSETS> 689,539,113
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .049
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.049)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .66
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>
Without the Manager's voluntary waiver of a portion of certain expenses for
this period, this fund would have had per share net investment income of $.049
and a ratio of expenses to average net assets of .67%. The amount waived was
$7,102.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 695,463,151
<INVESTMENTS-AT-VALUE> 695,463,151
<RECEIVABLES> 3,048,733
<ASSETS-OTHER> 19,872
<OTHER-ITEMS-ASSETS> 34,190
<TOTAL-ASSETS> 698,565,946
<PAYABLE-FOR-SECURITIES> 1,007,550
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 437,315
<TOTAL-LIABILITIES> 1,444,865
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 697,121,081
<SHARES-COMMON-STOCK> 519,726
<SHARES-COMMON-PRIOR> 207,737
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 697,121,081
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 38,198,478
<OTHER-INCOME> 0
<EXPENSES-NET> (4,581,415)
<NET-INVESTMENT-INCOME> 33,617,063
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (10,263)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 913,414
<NUMBER-OF-SHARES-REDEEMED> (611,240)
<SHARES-REINVESTED> 9,815
<NET-CHANGE-IN-ASSETS> 73,049,066
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,568,929
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,594,657
<AVERAGE-NET-ASSETS> 689,539,113
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .041
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.041)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Without the Manager's voluntary waiver of a portion of certain expenses
for this period, this fund would have had per share net investment income of
$.029 and a ratio of expenses to average net assets of 3.94%. The amount
waived was $6,140.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 695,463,151
<INVESTMENTS-AT-VALUE> 695,463,151
<RECEIVABLES> 3,048,733
<ASSETS-OTHER> 19,872
<OTHER-ITEMS-ASSETS> 34,190
<TOTAL-ASSETS> 698,565,946
<PAYABLE-FOR-SECURITIES> 1,007,550
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 437,315
<TOTAL-LIABILITIES> 1,444,865
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 697,121,081
<SHARES-COMMON-STOCK> 1,639,342
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 697,121,081
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 38,198,478
<OTHER-INCOME> 0
<EXPENSES-NET> (4,581,415)
<NET-INVESTMENT-INCOME> 33,617,063
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (6,820)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,820,278
<NUMBER-OF-SHARES-REDEEMED> (187,736)
<SHARES-REINVESTED> 6,800
<NET-CHANGE-IN-ASSETS> 73,049,066
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,568,929
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,594,657
<AVERAGE-NET-ASSETS> 689,539,113
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .030
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.030)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
Report of Independent Auditors on Internal Control Structure
Board of Directors and Shareholders
Princor Cash Management Fund, Inc.
In planning and performing our audit of the financial statements of Princor Cash
Management Fund, Inc. for the year ended October 31, 1996, we considered its
internal control structure, including procedures for safeguarding securities, in
order to determine our auditing procedures for the purpose of expressing our
opinion on the financial statements and to comply with the requirements of Form
N-SAR, not to provide assurance on the internal control structure.
The management of Princor Cash Management Fund, Inc. is responsible for
establishing and maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgments by management are required to assess the
expected benefits and related costs of internal control structure policies and
procedures. Two of the objectives of an internal control structure are to
provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's authorization and
recorded properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any evaluation
of the structure to future periods is subject to the risk that it may become
inadequate because of changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce to
a relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined above as of
October 31, 1996.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
ERNST & YOUNG
Des Moines, Iowa
November 27, 1996
