Cash And Cash Equivalents

RECENT NEWS
The Hindu Business Line  5 hrs ago  Comment 
Seeks fresh funds; takeover speculation grows
The Hindu Business Line  Mar 18  Comment 
Fancy buying the stock of a company with high cash reserves in the hope that it will join the buyback party? Well, if the company does come up with a buyback offer, you can take the plunge if you ...
Yahoo  Mar 15  Comment 
Odebrecht's Peruvian unit might not be able to pay creditors and suppliers starting next month after $30 million of its local assets were seized by authorities to ensure it will pay eventual reparations for bribes, a company source said. The...
The Hindu Business Line  Mar 1  Comment 
Payout will deplete cash reserves by $2.5 b, reducing ability to make a big acquisition
Forbes  Jan 5  Comment 
Organisers of Formula One’s British Grand Prix have revealed that they are considering putting the brakes on the race after its cash reserves reversed to just $13,000. The British Grand Prix was the first race on the F1 calendar when the...
Yahoo  Dec 19  Comment 
The Federal Reserve on Monday finalized a rule requiring big banks to disclose certain liquidity measures for the first time, as part of an effort to make sure they can cover large or rapid withdrawals. Notably, banks will have to post each...
BBC News  Nov 25  Comment 
One US Federal Reserve bank official, Neel Kashkari, wants his country's banks to keep much higher cash reserves, to reduce the chances of another major financial crisis.
The Economic Times  Nov 10  Comment 
To counter such frauds, government will check the unnatural rise in the cash reserves in these banks. They will be under scanner.
MarketWatch  Nov 8  Comment 
The French oil company said it will avoid U.S. sanctions on Iran by using its own euro-denominated cash to finance its share of an Iranian gas project.
guardian.co.uk  Oct 6  Comment 
How did a substance that falls from the air, springs from the earth and comes out of your tap become a hyperactive multibillion-dollar business? The dress code of the clientele in Planet Organic, Notting Hill is gym chic. On a hot day in...




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Cash and cash equivalents are assets in actual cash or quickly convertible to cash

Cash and cash equivalents are the most liquid current assets found on a company's balance sheet. They are assets that are easily and quickly converted into cash or are, in fact, cash. It should be noted that while functionally "cash equivalents" are eponymously equivalent to cash, this is not literally true; the Financial Accounting Standards Board (FASB) defines "cash equivalents" as highly liquid securities with maturity of 3 months or less. As such, a three-month treasury bill would be considered a cash equivalent.

A company's ability to generate cash a keep cash and cash equivalents is a primary indicator of its health. Companies with disproportionately high net assets relative to its cash and cash equivalents is generally an indication of non-liquidity.

For individual investors and companies, cash and cash equivalents are generally considered to be a safe investment with low risk and low returns. That is to say, maintaining significant assets in cash and cash equivalents (rather than investing them in securities or back into the company) is a low-risk investment strategy.

Examples

Examples of cash and cash equivalents are:

  • Cash in a bank account
  • Physical cash on hand
  • Certain Treasury Bills
  • money market instrument

Cash and Cash Equivalents data on Wikinvest

Wikinvest calculates Cash and Cash Equivalents by including cash at hand, restricted cash and gold bullions (except in the case of gold producing companies). Short-term investments such as commercial paper, T-bills or time deposits are included under the metric short-term investments.

The result may be different from other finance web portals (such as Yahoo! Finance) due to a different treatment of short-term investments. Cash For Gold Belfast

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