Cash and Equivalents

Refers to how much cash the company has on hand. ""Equivalents"" means things like certificates of deposit, commercial paper and the like, which can quickly and easily be converted into cash. Cash is king, as the saying goes, and a company with a lot of cash is in a formidable position. On the other hand, large amounts of cash are a drag on performance, since most successful companies can generate a far better return on other assets than on short-term investments.



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