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Information on Cash

This ‘information on cash’ hub has a list of the most common financial terms containing the word ‘cash’, and links to articles with more comprehensive explanations.

Etymologists say the English term ‘cash’ either came from southern India/Sri Lanka or one of the European romance languages. It may have come from the French word ‘caisse’, which means (money) ‘box’, or the Tamil word word kāsu (காசு), which means a ‘coin’. The Tamil word may have been brought to Europe by the East India Company.

Cash – the most liquid type of asset there is. In layman’s language it refers to just coins, notes and traveler’s checks. In finance, checks, short-term deposits and other negotiable instruments are also classified as cash.

Cash Accounting – an accounting method in which receipts and payments are entered on the day they happen, rather than when the orders are placed. Cash accounting is more commonly used by smaller businesses. Larger businesses use the accrual accounting method.

Cash Against Documents – an arrangement where the buyer, usually an importer, can only collect delivered goods after paying the related bill of exchange in full.

Cash Conversion Cycle (CCC) – a measure of how long invested money takes to start appearing in a business’ cash flow. Also known as cash cycle and net operating cycle.

Cash Cow – a product (brand), business or firm’s division that brings in a good income in a mature market. A cash cow has a leading market share, is highly profitable, and does not require much reinvestment.

Cash Crop – an agricultural crop that is sold for money. Contrasts with a subsistence crop, which feeds the farmer and his family.

Cash Equivalents – assets that are highly liquid (but less so than pure cash). Cash equivalents can be quickly converted into cash, have a high credit quality, and are very short term investments. In a company’s financial statement, they are usually grouped with cash (cash & cash equivalents).

Cash Flow – a revenue or expense stream that raises or reduces a cash account over a given period. Cash flow is the flow of money coming in and leaving an organization, business, or an account.

Cashier – somebody who operates the cash register in a shop, hotel, movie theater, hairdresser, and other types of businesses. In British English the term also refers to a bank employee that deals directly with customers (US: bank teller). In accountancy, it could be an employee in charge of receiving and disbursing payments.

Cashier’s Check – a check that is signed by the bank cashier, guaranteed by a bank, and drawn directly on a customer’s account. The bank assures the payee that payment will be honored. Also known as a teller’s check, banker’s draft, and treasurer’s check.

Cash Management – managing how much money comes in and leaves a company, and when these payments and receipts occur. It is also a banking service, usually offered to larger corporate customers.

Cash Market – a public market in which commodities and financial instruments are bought and sold immediately (maximum of two working days from trade date). Contrasts with the futures market. Also known as the physical market or spot market.

Cash Ratio – one of the ways a company’s liquidity is measured. All cash and cash equivalents are added up, the total is divided by all current liabilities. Also known as cash coverage ratio or cash asset ratio.

Cash Register – a machine found in restaurants, shops and other businesses that stores money and records the amount received from each sale. Also called a till in the UK.