How To- Understand Cash and Cash Equivalents

Investing Term of the Day:

Cash and Cash Equivalents

Cash includes cash and money in savings accounts.

Cash Equivalents are things that can easily be converted to cash.

They include:
– treasury bills
– certificates of deposit
– money market instruments
– bankers’ acceptances
– corporate commercial paper

Having cash is important because it means the company can pay its short-term debt.

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