Cash Is King
Definition of 'Cash Is King'The belief that money (cash) is more valuable than any other form of investment tool. The "cash is king" phrase is typically used when prices in the securities market are high and investors decide to save their cash for when prices are cheaper. It can also refer to the balance sheet or cash flow of a business; a lot of cash on hand is normally a positive sign, while strong cash flow allows a company more flexibility in regards to business decisions and potential investments. |
|
Investopedia explains 'Cash Is King'In the world of investments, investors who favor this phrase may opt to buy short-term debt instruments versus buying high-priced securities.The phrase also refers to the ability of a corporation or a business to have enough cash on hand to cover short-term operations, buy assets such as equipment and machinery, or acquire other facilities. More businesses fail for lack of cash flow than for lack of profit. |
Related Definitions
Articles Of Interest
-
Zooming In On Net Operating Income
NOI is a long-run profitability measure that smart investors can count on. -
Operating Cash Flow: Better Than Net Income?
Differences between accrual accounting and cash flows show why net income is easier to manipulate. -
Cash: Can A Company Have Too Much?
Cash is something companies love to have. But if they are not using it there could be problems. -
What Is A Cash Flow Statement?
Learn how the CFS relates to the balance sheet and income statement as a part of a company's financial reports. -
Taking Stock Of Discounted Cash Flow
Learn how and why investors are using cash flow-based analysis to make judgments about company performance. -
Spotting Cash Cows
We show you why some of these companies stand apart from the herd. -
Depreciation: Straight-Line Vs. Double-Declining Methods
Appreciate the different methods used to describe how book value is "used up". -
The NYSE And Nasdaq: How They Work
Learn some of the important differences in the way these exchanges operate and the securities that trade on them. -
Financial Statement: Extraordinary Vs. Nonrecurring Items
When it comes to analyzing a company, successful analysts spend considerable time differentiating between accounting items that are likely to recur going forward from those that most likely will ... -
Get A Career In Showbiz Accounting
An accounting career doesn't have to be boring. If you love numbers, but want excitement as well, consider the field of showbiz accounting.
Free Annual Reports