Definition of 'Unrestricted Cash'
Monetary reserves that are not tied to a particular use. Unrestricted cash represents instant reserves, as it can be used for any purpose and is extremely liquid. Often, in order to satisfy debt covenants, firms will have to maintain a certain level of cash on their balance sheets - the amount that exceeds the requirements is referred to as unrestricted cash.
An organization's liquid funds include cash, unrestricted cash, cash equivalents, unrestricted short-term (ST) investments, plus net short-term borrowing capacity.
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