Cash Position


This shows the quantity of cash that a company or bank is holding at a given point in time.


A company's cash position gives a good indication of stability, a healthy cash position is a good sign that there are few problems on the horizon as liabilities and obligations can be met. A weak cash position should signal to the investor that there may be problems ahead.

In times of low interest rates, a large cash position could be a sign of mis-management, as there is likely to be little return on cash.

Investment companies can give an inadvertent signal on their view of the market based on their cash position, a company with a low cash position is likely to be bullish on the market. A large cash position infers the reverse, that the company is unwilling to be a buyer.


A bank's cash position gives an indication of the quantity of cash held in cash, cash equivalents, and short term government debt at any given time. Banks are usually regulated to hold a minimum amount of cash deposited either in its vaults or deposited at a central bank, this is called its reserve ratio.

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