Cash Equivalents

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Last updated: January 23, 2023

Cash equivalents are highly-rated, short-term, liquid investments that are readily convertible to cash and have short-term maturities. In the context of a bond/loan, cash equivalents receive the same treatment as cash and allow the issuer/borrower to make unlimited investments in them.

Cash and cash equivalents usually appear as a single line item on a company’s balance sheet.

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