{"id":6093,"date":"2021-10-25T00:42:00","date_gmt":"2021-10-24T23:42:00","guid":{"rendered":"https:\/\/www.simtrade.fr\/blog_simtrade\/?p=6093"},"modified":"2021-10-25T00:42:00","modified_gmt":"2021-10-24T23:42:00","slug":"cash-cash-equivalents","status":"publish","type":"post","link":"https:\/\/www.simtrade.fr\/blog_simtrade\/cash-cash-equivalents\/","title":{"rendered":"Cash and Cash Equivalents"},"content":{"rendered":"<h1>Cash and Cash Equivalents<\/h1>\n<p><a href=\"https:\/\/www.linkedin.com\/in\/shrutichand96\/\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" style=\"padding: 5px\" title=\"\" src=\"https:\/\/www.simtrade.fr\/blog_simtrade\/wp-content\/uploads\/2021\/03\/img_SimTrade_Photo1_Shruti_Chand.jpg\" alt=\"Shruti Chand\" width=\"133\" align=\"right\" \/><\/a><\/p>\n<p>In this article,\u00a0<a href=\"https:\/\/www.linkedin.com\/shrutichand96\/\" target=\"_blank\" rel=\"noopener\">Shruti Chand<\/a>\u00a0(ESSEC Business School, Master in Management, 2020-2022) elaborates on the concept of\u00a0<i>cash equivalents<\/i><\/p>\n<p>This read will help you get started with understanding\u00a0the concept and its significance in determining financial health of a business.<\/p>\n<h2>Introduction<\/h2>\n<p>Cash and Cash Equivalents on the assets side of the balance sheet is the total amount of cash or assets that can be converted into cash on an immediate basis. Any bank accounts or marketable securities that a business owns can be categorized as cash equivalents.<\/p>\n<h2>What is included in Cash and Cash Equivalents?<\/h2>\n<p>Cash equivalents are the assets with short maturities typically 90 days or less. Examples of cash equivalents on a firm\u2019s balance sheet include:<\/p>\n<ul>\n<li>Treasury Bills<\/li>\n<li>Money market mutual funds<\/li>\n<li>Commercial Paper (bought from other firms)<\/li>\n<li>Bank Certificates of deposit<\/li>\n<li>Repurchase agreements<\/li>\n<li>Other money market instruments<\/li>\n<\/ul>\n<p>Cash on the other hand is not limited to the amount of money in checking and savings accounts (and coins and banknotes). It also includes assets such as cheques received but not deposited.<\/p>\n<p>Cash and Cash Equivalents is recorded in the balance sheet in the \u201cCurrent assets\u201d section. Cash and Cash equivalents are related to other current assets that will transformed into cash later.<\/p>\n<h2>Measure of liquidity<\/h2>\n<p>Cash and Cash equivalents are used to measure the liquidity of the firm. For example, in financial analysis, it enters the computation of liquidity ratios.<\/p>\n<h2>Final Words<\/h2>\n<p>Cash and Cash equivalents may be a small part on the balance sheet of a firm but have a lot of impact as it is used to pay day-to-day operations of the firm on a very frequent basis.<\/p>\n<h2>Related posts on the SimTrade blog<\/h2>\n<p>&nbsp;&nbsp;&nbsp;&#9654; Shruti CHAND <a href=\"https:\/\/www.simtrade.fr\/blog_simtrade\/balance-sheet\/\" target=\"_parent\" rel=\"noopener\">Balance sheet<\/a><\/p>\n<p>&nbsp;&nbsp;&nbsp;&#9654; Shruti CHAND <a href=\"https:\/\/www.simtrade.fr\/blog_simtrade\/current-assets\/\" target=\"_parent\" rel=\"noopener\">Current Assets<\/a><\/p>\n<h2>About the author<\/h2>\n<p>Article written in October 2021 by\u00a0<a href=\"https:\/\/www.linkedin.com\/shrutichand96\/\" target=\"_blank\" rel=\"noopener\">Shruti CHAND<\/a>\u00a0(ESSEC Business School, <i>Grande Ecole<\/i> Program &#8211; Master in Management, 2020-2022).<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Cash and Cash Equivalents In this article,\u00a0Shruti Chand\u00a0(ESSEC Business School, Master in Management, 2020-2022) elaborates on the concept of\u00a0cash equivalents This read will help you get started with understanding\u00a0the concept and its significance in determining financial health of a business. Introduction Cash and Cash Equivalents on the assets side of the balance sheet is the &#8230; <a title=\"Cash and Cash Equivalents\" class=\"read-more\" href=\"https:\/\/www.simtrade.fr\/blog_simtrade\/cash-cash-equivalents\/\" aria-label=\"Read more about Cash and Cash Equivalents\">Read more<\/a><\/p>\n","protected":false},"author":28,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5,10],"tags":[124,125],"class_list":["post-6093","post","type-post","status-publish","format-standard","hentry","category-contributors","category-financial-techniques","tag-cash","tag-cash-equivalents"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.3 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Cash and Cash Equivalents - SimTrade blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.simtrade.fr\/blog_simtrade\/cash-cash-equivalents\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Cash and Cash Equivalents\" \/>\n<meta property=\"og:description\" content=\"Cash and Cash Equivalents In this article,\u00a0Shruti Chand\u00a0(ESSEC Business School, Master in Management, 2020-2022) elaborates on the concept of\u00a0cash equivalents This read will help you get started with understanding\u00a0the concept and its significance in determining financial health of a business. 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