Cash Per Share

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DEFINITION of 'Cash Per Share '

A company's total cash divided by its shares outstanding. Cash per share is the percentage of a firm's share price that is immediately accessible for spending on activities such as research and development, mergers and acquisitions, purchasing assets, paying down debt, buying back shares and making dividend payments to shareholders. Cash per share consists of cash and short-term investments. It is money that a firm has on hand, it does not come from borrowing or financing activities.

INVESTOPEDIA EXPLAINS 'Cash Per Share '

When a firm has high levels of cash per share, it is holding a significant percentage of its assets in a very liquid form. This decision can indicate economic uncertainty and an unwillingness by firms to invest given the current economic climate. High levels of cash per share can indicate that a firm is performing well, with positive earnings and cash flow and the ability to reinvest in itself; however, high levels of cash per share do not always coincide with overall financial strength.

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