Search results
Jul 31, 2023 · Cash equivalents are highly liquid investment securities that can be converted to cash easily and are found on a company's balance sheet.
Jan 3, 2023 · A cash equivalent is an investment security or current asset that an individual or company can quickly convert to cash. Examples of cash equivalents include bank accounts and marketable securities, such as: Certificates of deposit. Checking and savings accounts. U.S. government Treasury bills (T-bills) Short-term government bonds.
May 31, 2024 · Cash equivalents are short-term investments that can be easily liquidated, carry low risk of loss, and have active marketplaces to ensure quick transacting.
- Contributor
- Money Market Mutual Funds. Money market mutual funds, not to be confused with lower yielding bank money market savings accounts, invest only in highly liquid cash and cash-equivalent securities with high credit ratings – typically government and commercial debt.
- One-Month U.S. Treasury Bills. Steven Jon Kaplan, CEO at True Contrarian Investments in New York City, explains a potential problem of cash-equivalent investments.
- Short-Term Municipal Bonds. Short-term municipal bonds are a fixed-income cash-equivalent investment for high tax-bracket investors. Muni bonds are an attractive alternative when comparing its tax-equivalent yield with corporate bond funds.
- Short-Term Government Floating Rate Debt. Floating rate notes, first issued by the U.S. government in 2014, pay a variable interest rate based on 90-day Treasury bills' returns plus a spread.
Cash equivalents are low-risk, short-term investments with original maturity periods of three months or less. Examples of cash equivalents include bank certificates of deposit, banker’s acceptances, Treasury bills, commercial paper, and other money-market instruments.
Cash equivalents generally are highly liquid investments with a three-month or shorter maturity, good credit quality, and unrestricted availability for immediate use.
People also ask
Are cash equivalents a good investment?
What is an example of a cash equivalent?
What are cash equivalents & why are they important?
Is a stock a cash equivalent?
What are cash equivalent securities?
When does an investment qualify as a cash equivalent?
Cash equivalents are short-term investment securities that can be quickly converted into cash, making them essential components of a company’s current assets. They are characterized by high liquidity and low risk, often featuring solid credit quality.
