What is Cash at End of Period?

Cash at End of Period is the closing balance of cash and cash equivalents reported on the balance sheet at the end of a financial period. It shows the amount of liquid assets available to the company as of that date.

Why is Cash at End of Period Important?

Cash at End of Period is important because it:

• Indicates Liquidity: Reflects the company’s ability to meet short-term obligations and fund operations.
• Supports Cash Flow Analysis: Serves as the ending point in the cash flow statement reconciliation, illustrating net cash changes over the period.
• Guides Strategic Decisions: Helps management assess available resources for investments, debt repayment, and dividend payments.

How is Cash at End of Period Calculated?

Cash at End of Period is determined by:

Cash at End of Period = Cash at Beginning of Period + Net Change in Cash

Where Net Change in Cash is the sum of cash flows from operating, investing, and financing activities, plus foreign exchange effects.

Additional Considerations

• Reconciliation: Should reconcile to the cash flow statement to ensure consistency between beginning and ending cash balances.
• Components: Includes cash on hand, demand deposits, and highly liquid investments with maturities of three months or less.
• Seasonality: End-of-period cash balances may fluctuate due to seasonal business cycles, requiring analysis over multiple periods.