Net Cash

Loading the player...

What is 'Net Cash'

Net cash is a company's total cash minus total liabilities when discussing financial statements. Net cash is commonly used in evaluating a company's cash flow. More generally, net cash can refer to the amount of cash remaining after a transaction has been completed and all charges and deductions related to the transaction have been subtracted.

"Net cash" may also be used as short form for "net cash per share", a stock investing term. More commonly, "net cash" will appear with another word, as in "net cash flow", "net cash income" or "net cash stock".

BREAKING DOWN 'Net Cash'

Investors can use net cash to help determine whether a company's stock offers an attractive investment opportunity, and in some cases it can be used in conjunction with other measures to gauge the company's liquidity. Also, net cash might be used to assess whether a company has enough cash to make investments in future projects.

RELATED TERMS
  1. Liability

    A company's legal debts or obligations that arise during the ...
  2. Cash Flow

    The net amount of cash and cash-equivalents moving into and out ...
  3. Return On Investment - ROI

    A performance measure used to evaluate the efficiency of an investment ...
  4. Net Payoff

    The profit (or loss) from the sale of an item after the costs ...
  5. Internal Growth Rate

    The highest level of growth achievable for a business without ...
  6. Investment

    An asset or item that is purchased with the hope that it will ...
Related Articles
  1. Investing Basics

    Calculating Net Cash

    A company’s net cash is its total cash remaining after it subtracts all liabilities.
  2. Investing Basics

    What Is The Impact Of Research On Stock Prices?

    The answer to this question is directly related to the importance of information in the marketplace.
  3. Options & Futures

    Finding Undiscovered Stocks

    Wall Street tends to focus on large cap stocks, leaving other stocks under-followed and undervalued.
  4. Investing

    Cheap Stocks Or Value Traps?

    The value of stocks that trade at less than cash per share can be deceiving.
  5. Investing Basics

    Introduction To Investment Diversification

    Reducing risk and increasing returns in your portfolio is all about finding the right balance.
  6. Options & Futures

    Fee-Based Research: The Good, The Bad And The Ugly

    Providing information on stocks that would otherwise not be available, fee-based research plays an important but complicated role in the market.
  7. Options & Futures

    Dividends, Interest Rates And Their Effect On Stock Options

    Learn how analyzing these variables are crucial to knowing when to exercise early.
  8. Investing Basics

    Knowing Your Rights As A Shareholder

    We delve into common stock owners' privileges and how to be vigilant in monitoring a company.
  9. Fundamental Analysis

    Taking Stock Of Discounted Cash Flow

    Learn how and why investors are using cash flow-based analysis to make judgments about company performance.
  10. Term

    What Is Stockholders' Equity?

    Stockholders’ equity represents the equity that shareholders own in a company.
RELATED FAQS
  1. Is free cash flow the same as net free cash flow?

    Know the difference between your net cash flow and free cash flow when pitching your company to any of your potential stockholders. Read Answer >>
  2. What items are considered liquid assets?

    Learn what a liquid asset is, some examples of liquid assets, what a non-liquid asset is and what determines whether as asset ... Read Answer >>
  3. Do you discount working capital in net present value (NPV)?

    Learn why changes in net working capital (NPV) should be included in net present value calculations for analyzing a project's ... Read Answer >>
  4. How is working capital different from fixed capital?

    Understand the differences between working capital and fixed capital, including definitions and examples of how businesses ... Read Answer >>
  5. How can working capital affect a company's finances?

    Understand how working capital may affect a company's financial strength and investment effectiveness, as it changes from ... Read Answer >>
  6. What are working capital costs?

    Discover what costs are included in working capital, and learn how to use working capital as an indicator of a company's ... Read Answer >>
Hot Definitions
  1. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  2. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  3. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  4. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  5. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  6. Economies Of Scale

    Economies of scale is the cost advantage that arises with increased output of a product. Economies of scale arise because ...
Trading Center