Cash and Equivalents

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Definition

Cash and equivalents is cash or cash equivalents that a company possesses at any given time. Examples of cash equivalents are: money market accounts, treasury bills, and short term government bonds. Cash and cash equivalents are a business' most liquid assets. Cash on hand results from a positive cash flow statement.

Investors look at cash on hand as a reflection of a company's solvency and liquidity.

Formula

Cash and Equivalents = Cash + Cash Equivalents

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