Cash Equivalent
Financial Dictionary — Liquidity & Cash Management
Definition
Short-term interest-earning financial instruments that are deemed to be highly secure and will convert back into cash within 90 days
Detailed Explanation
Cash equivalents are short-term, highly liquid investments that can be quickly converted into known amounts of cash.
Common Uses
- Used in planning, organizing, and controlling business operations.
- Used when setting KPIs, policies, procedures, and improving processes.
- Used when setting KPIs, policies, procedures, and improving processes.
Practical Example
- Example: Management applies **Cash Equivalent** when designing policies and monitoring performance against targets.
Why This Term Matters
- Why it matters: Improves execution, accountability, and decision speed while reducing operational waste.