On the heels of a powerful wave of cost cutting, U.S. corporations have boosted their free cash flow to historic levels. But with little left to cut, they may soon find themselves on the brink of a drop in cash from which only a return of revenue can save them.

Still, mainly through restraints forced on them by the recession, many companies have been able to throw off scads of excess cash in the absence of sales. Thus, as revenues stayed flat during the 12 months ending March 2010 as compared with the 12 months ending December 2009, median free cash flow jumped by about 10%, according to the latest report on the Free Cash Margin Index produced by the Georgia Tech Financial Analysis Lab. (Free cash flow is cash available for shareholders after all prior claims against the company have been satisfied.)

Further, the bang companies have been able to get out of the sales dollars they’ve generated has been impressive. Free cash margin (free cash flow divided by revenue) hit 6.69% during the 12 months ending March 2010, up from the previous 10-year high of 6.56% during the 12 months ending December 2009, according to the research, which looks at 3,848 nonfinancial companies with market caps of over $50 million.

True, the rise in free cash margin over 2009 isn’t that large. But the figure represents “more cash per dollar of revenue than we’ve ever seen companies generate,” says Charles Mulford, a professor of accounting at Georgia Tech and head of the lab. “Any continued improvement in [free cash] margin with flat revenues is still interesting and impressive.” Median revenues have remained at around $528 million since the 12 months ending September 2009.

In the absence of revenue, where are companies finding all that free cash? For years, many squeezed their capital expenses in search of it. But capex as a percentage of revenue has remained flat at 2.8% from the 12 months trailing December 2009 through the same period ending in March 2010. “They’ve cut capital expenditures to the bone,” says Mulford. “That means that they’ve got to continue spending at least that level just to maintain fixed assets. So that easy money is done.”

But companies have continued to find free cash flow through reductions in advertising efforts, office overhead, and other cost-control efforts. Sales, general, and administrative expenses as a percentage of revenue, for example, have been dropping since the 12 months trailing September 2009.

Such efforts, however, might be reaching a point of diminishing returns. Mulford is concerned that continued anemia in sales will start to squeeze free cash margins. “It’s like we’re sitting on this precipice,” he says. “Or do we see the next decline — a double-dip recession?”