what is the difference between cash and cash equivalents 
cash is ownership of actual u s dollars or other currencies cash equivalents are interest earning financial vehicles investments that are widely traded highly liquid and easy to convert to cash cash equivalents are not identical to cash in hand though they have such low risk and high liquidity that they re often considered as accessible the bottom lineif a company wants to earn some return on its money as it plans its long term strategy it can choose to invest some of its capital in cash equivalents these very short term low risk highly liquid investments may not make a tremendous amount of money however they earn more than cash in a bank account and can be converted into cash quickly and easily 