Definitions for cash equivalent
cash equiv·a·lent

Princeton's WordNetRate this definition:0.0 / 0 votes

1. cash equivalentnoun

   a highly liquid debt instrument with maturities of less than three months

WikipediaRate this definition:0.0 / 0 votes

1. cash equivalent

   Cash and cash equivalents (CCE) are the most liquid current assets found on a business's balance sheet. Cash equivalents are short-term commitments "with temporarily idle cash and easily convertible into a known cash amount". An investment normally counts as a cash equivalent when it has a short maturity period of 90 days or less, and can be included in the cash and cash equivalents balance from the date of acquisition when it carries an insignificant risk of changes in the asset value. If it has a maturity of more than 90 days, it is not considered a cash equivalent. Equity investments mostly are excluded from cash equivalents, unless they are essentially cash equivalents (e.g., preferred shares with a short maturity period and a specified recovery date).One of the company's crucial health indicators is its ability to generate cash and cash equivalents. So, a company with relatively high net assets and significantly less cash and cash equivalents can mostly be considered an indication of non-liquidity. For investors and companies cash and cash equivalents are generally counted to be "low risk and low return" investments and sometimes analysts can estimate company's ability to pay its bills in a short period of time by comparing CCE and current liabilities. Nevertheless, this can happen only if there are receivables that can be converted into cash immediately.However, companies with a big value of cash and cash equivalents are targets for takeovers (by other companies), since their excess cash helps buyers to finance their acquisition. High cash reserves can also indicate that the company is not effective at deploying its CCE resources, whereas for big companies it might be a sign of preparation for substantial purchases. The opportunity cost of saving up CCE is the return on equity that company could earn by investing in a new product or service or expansion of business.

ChatGPTRate this definition:0.0 / 0 votes

1. cash equivalent

   Cash equivalent refers to highly liquid short-term investments that can be easily and immediately converted into a known amount of cash, typically with a maturity date of three months or less (like Treasury bills, commercial papers, and money market funds). They are considered as safe and secure as cash due to their low-risk and high-liquidity nature. The term is often used in financial accounting and investing.

Matched Categories

1. • Debt Instrument

How to pronounce cash equivalent?

1. Alex

   US English

   David

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   Mark

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   Daniel

   British

   Libby

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   Karen

   Australian

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   South African

How to say cash equivalent in sign language?

Numerology

1. Chaldean Numerology

   The numerical value of cash equivalent in Chaldean Numerology is: 4

2. Pythagorean Numerology

   The numerical value of cash equivalent in Pythagorean Numerology is: 4

References

1. ^ Princeton's WordNet
   http://wordnetweb.princeton.edu/perl/webwn?s=cash equivalent
2. ^ Wikipedia
   https://en.wikipedia.org/wiki/Cash_Equivalent
3. ^ ChatGPT
   https://chat.openai.com