Cash Reserves

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Definition of 'Cash Reserves '

In finance, cash reserves primarily refers to two things. One is a type of short-term, highly liquid investment that earns a low rate of return (perhaps 3\% annually) such as investment company Fidelity's mutual fund called Fidelity Cash Reserves. This is where some individuals keep money that they want to have quick access to. The other type of cash reserves refers to the money a company or individual keeps on hand to meet its short-term and emergency funding needs.
Investopedia Says

Investopedia explains 'Cash Reserves '

The commonly recommended eight-month emergency fund that individuals are advised to have is a type of cash reserves. Individuals hold their cash reserves in bank accounts or in short-term, stable investments that are not likely to lose value so that they can withdraw these funds or sell these investments at any time without losing money, regardless of how well the stock market is performing.

An individual's cash reserves might consist of money in a checking account, savings account, money-market fund or money-market account, and short-term Treasury Bills and CDs. Individuals and businesses that lack sufficient cash reserves can resort to credit, or in extreme cases may be forced into bankruptcy.

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'Cash Reserves '

  • Cash: Can A Company Have Too Much?

    http://www.investopedia.com/articles/fundamental/03/062503.asp
    ... How investors interpret cash reserves depends on how the cash got there, the kind
    of business the company is and what managers plan to do with the cash. ...

  • Spotting Profitability With ROCE

    http://www.investopedia.com/articles/stocks/05/010305.asp
    ... ROCE is a good measure of profitability, it may not provide an accurate reflection
    of performance for companies that have large cash reserves, which could be ...

  • Burn Rate Key Factor In Company's Sustainability

    http://www.investopedia.com/articles/fundamental/04/022504.asp
    ... cash - assuming no change in the burn rate. Time Before Cash Runs Out =
    Cash Reserves/Burn Rate. If you want to know if a company ...

  • 4 Ways To Weather An Economic Storm

    http://www.investopedia.com/articles/pf/09/surviving-an-economic-crisis.asp
    ... Companies that perpetually overextend themselves in good times are easy to spot,
    as they languish and burn up their cash reserves in hard times. ...

  • The Advantages Of Investing In Aggressive Companies

    http://www.investopedia.com/articles/basics/03/072503.asp
    ... A company should have the cash reserves fat enough to adjust to changes in
    the market climate without starving. Some notable companies ...

  • 8 Must-Have Numbers For Evaluating A Real Estate Investment ...

    http://financialedge.investopedia.com/financial-edge/0511/8-Must-Have-Numbers-For-Evaluating-A-Real-Estate-Investment.aspx
    ... prefer a total debt-to-income ratio of 36%, but some will go up to 45% depending
    on other qualifying factors such as your credit score and cash reserves. ...

  • A Turbulent Year For Airlines

    http://stocks.investopedia.com/stock-analysis/2009/A-Turbulent-Year-for-Airlines-DAL-CAL-AMR-UAUA-BA1215.aspx
    ... as the recession-induced slump in air travel pushed most major air carriers into
    their second consecutive year of losses, straining their cash reserves. ...

  • Activist Hedge Funds: Follow The Trail To Profit

    http://www.investopedia.com/articles/mutualfund/06/activisthedgefund.asp
    ... These may include management replacements, mergers or acquisitions, capital structure
    changes, disbursement of cash reserves and other items. ...

  • Cash Heavy Companies

    http://stocks.investopedia.com/stock-analysis/2010/5-Cash-Heavy-Companies-GOOG-AAPL-CSCO-F-MSFT-ORCL0308.aspx
    ... Cash Heavy Companies. Posted: Mar ... Maryland. The large cash holdings have led
    to an increase in stock buybacks and dividends. Standard ...

  • What Are Proved Reserves Worth?

    http://stocks.investopedia.com/stock-analysis/2011/What-Are-Proved-Reserves-Worth-PXD-UNT-CXO-DNR0214.aspx
    ... also report a non GAAP measure known as the PV-10 value, which represents the net
    cash flows that these proved reserves will generate, discounted at 10%. ...

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