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An organization really should be capable to promote or liquidate a cash equal instantly on need without the need of fear or product decline for the merchandise. Cash equivalents are extremely very low hazard assets devoid of significant cost fluctuations.
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The Bottom Line Cash and cash equivalents are probably the most liquid current assets on a company's harmony sheet. The assortment of economic items that comprise the stability of the classification usually have maturities of ninety days or much less, are effortlessly convertible to cash, reduced danger, and must not have limits that limit their liquidity.
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