It is not possible to have negative Cash on Hand
Include | Don’t include |
Petty cash and money in bank accounts | Assets |
Calculation
∑of money immediately available
__________________________
= Cash on Hand
OR:
CoH at beginning of period
– Expenses
+ Receipts
_________________________
= Cash on Hand at end of period
At the beginning of February a company has 52.000 € Cash on Hand. In February they have expenses of 12.000 € and receipts of 8.000 €. Their Cash on Hand at the end of the month is therefore calculated as follows:
+52.000€
-12.000€
+8.000€
________
=48.000€
Alias | Cash Balance/Cash/Liquid Assets |
Abbreviation | COH |
Unit | Currency (Euro/Dollar/YEN/…) |
Q&A
Q: Can I just add the months Revenue and deduct the months Total Cost to get my new Cash on Hand?
A: Usually not, as the sale and the actual cash flow do not necessarily occur in the same month.