Money-market holdings, short-term government bonds, treasury bills and savings bonds are examples of cash equivalents. Cash equivalents are short-term investments that can be immediately converted to cash and mature in three months or less.Know More
A cash equivalent can be identified as short-term investment having little or no risk of a change in value. It is listed as a current asset on a company’s balance sheet. Maintaining adequate cash equivalents is critical to ensuring a company's liquidity. Cash equivalents can be converted to cash to pay dividends to shareholders or to navigate through difficult periods in a business cycle. When profitable businesses with strong cash reserves encounter tough economic conditions, they often use cash reserves to buy weaker competitors or to increase market share through expansion.
It is possible to have too much capital in the form of cash equivalents. Because of their liquidity, cash equivalents do not earn a high rate of return. Although having sizable cash and cash equivalents is generally positive, care must be taken to understand the source of the reserves. If these investments have been purchased through the use of borrowed capital, it does not indicate the same financial strength as if they had been generated through free cash flow.Learn more about Currency & Conversions
Examples of money markets include certificates of deposit, treasury bills, commercial paper and bankers' acceptance, according to BusinessDictionary.com. Money market instruments provide governments and corporations short-term access to capital, explains Investopedia.Full Answer >
The most common place to exchange coins for cash is a bank. There are also companies, such as Coinstar, with kiosks in certain locations that can count your coins and exchange them for cash. However, these kiosks charge a fee.Full Answer >
While electronic cash does provide a more secure means of storing and tracking money, it is not entirely immune to theft. There are a number of different advantages to digital money, but a similar number of disadvantages exist. In addition to security, it is also easier to store and move from one institution to another.Full Answer >
Some examples of currency counters include Cassida machines, AccuBANKER counters and JetScan counting machines. These machines are normally used to count money quickly to save time and avoid miscalculations.Full Answer >