Cash out is when a business pays money to cover expenses such as employee salaries, rent, and equipment. Payments can be made in cash, checks, or credit transactions. Cash outlays are tracked in a ledger and subtracted from cash receipts to determine a company’s income. Cash out is a process by which a business pays […]
Cash plus funds are low-risk portfolios with high liquidity, containing cash or cash equivalent values and short-term government debt securities. They are best suited for conservative investors and those with a short-term investment horizon. The funds also contain debt securities such as bonds, but these pay little interest compared to longer-term bonds. They are suitable […]
Cash earnings per share is a measure of a company’s financial performance calculated by dividing operating cash flow by the number of fully diluted shares. It is a more objective measure than basic earnings per share, as it is less influenced by subjective judgments and accounting policies. Non-cash items such as depreciation and amortization are […]
The Cash Coverage Ratio formula determines if a business has enough funds to pay interest and operating costs. The ratio takes EBIT, non-cash expenses, and interest expense to show how much money a company has compared to its debt. A ratio greater than 1 is best, while less than 1 indicates bankruptcy. The Cash Coverage […]
A cash journal is a document used to make immediate accounting entries for receipts and expenses, with transactions recorded daily or in chronological order. It can be used by businesses to track a wide range of receipts and payments or to track an area of activity. The key to effective cash is entering enough information […]
Cash in Transit (CIT) refers to the movement of physical cash or funds from one location to another, including deposits and wire transfers. It can also involve security companies transporting cash from one location to another. Deposits and transfers must be received by a certain time to be posted on the same business day. Cash […]
Basic cash management techniques include tracking expenses and accounts receivable, starting a line of credit, and keeping financial records to ensure a positive cash flow and profit for a business. Basic cash management techniques are financial strategies that many business owners employ to keep track of all the money involved in their businesses. This can […]
Cash inheritance is received in the form of cash or cash assets and may or may not be subject to cash income tax or inheritance tax. Laws vary, so it’s important to consult an attorney to understand the tax obligations. The status of a cash inheritance may differ for federal and state tax agencies, and […]
Cash flow diagrams show the amount of money going in and out of a project, with even parts representing time periods. Arrows indicate inflow or outflow, and the diagram shows recovered money and payment schedules. It is used alongside other charts to track overall balance and profit. Accountants, project managers, and engineers looking to show […]
Cash on hand refers to liquid assets, including accessible balances in bank accounts and credit funds, that are immediately available to individuals or businesses. These assets must be liquid and do not require the sale or transfer of physical or intangible items. Proof of liquid assets may be required by creditors before extending loans or […]
Net cash flow from operating activities is the amount of income generated from business operations after deducting operating expenses, which is important for determining a company’s liquidity. It reflects the amount of cash a company has on hand to pay invoices and distinguishes between a healthy financial position on paper and in practice. It is […]
Unequal cash flows refer to a series of payments made over time, while fixed payments are equal. Financial managers use financial formulas to find the present value of future cash flows to calculate the fair value of an investment. Unconventional bonds, such as index-linked bonds, have cash flows that reflect changes in an index, making […]
Cash flow management involves estimating available cash, predicting surpluses or shortages, and identifying causes. Tips include knowing indicators, evaluating credit policies, invoicing on time, and renegotiating contracts. Cash flow management is the ability of a business to estimate the amount of cash available, the amount of money going into the business, and the amount of […]
Johnny Cash, known as “the man in black”, was a legendary American country musician who sold over 50 million albums in a career spanning nearly 50 years. He achieved commercial success with hits like “Folsom Prison Blues” and “I Walk the Line”. Cash also dealt with drug addiction issues and was known for his prison […]
Modified cash basis combines elements of accrual and cash accounting methods. It is a viable compromise that brings together the benefits of both methods while minimizing the drawbacks. It is effective for day-to-day expenses but not for formal financial statements. A modified cash basis is an accounting strategy that combines specific elements of two commonly […]
Close to the money refers to highly liquid assets that can be quickly converted to cash with little or no loss of value. Examples include government securities and monetary funds, while company stock is not classified as close money. Close money can have a significant effect on an economy, as it can easily increase the […]
Excess cash flow is unencumbered money earned by a business after meeting financial obligations, which can be used for any purpose. It serves as a yardstick for loan repayment and can benefit finance companies linked to the business. Excess cash flow is a term used in reference to the extra or excess cash a business […]
Cash purchases of securities and products are becoming more popular due to immediate ownership, fewer fees, and no outstanding payments. Buyers with liquid assets can benefit from cash discounts and peace of mind. The cash purchase is about buying securities and products outright, rather than arranging some form of financing as part of the acquisition. […]
Cash discounts are incentives offered by companies to customers who pay outstanding invoices early or with cash instead of credit cards. Discounts can appear as credits on bills or be applied to future purchases. Some vendors offer instant discounts for cash payments to avoid credit card processing fees. A cash discount is a customer relations […]
A cash card can refer to a card used only at bank ATMs or a prepaid card for purchases/withdrawals. Debit cards can also be called cash cards. Prepaid cards can be specific to a store or general credit cards offer more flexibility. A cash card can have several different definitions. One is that the card […]
