Days of Cash on Hand Calculator

Formula

The formula to calculate the Days of Cash on Hand (D) is:

\[ \text{D} = \left(\frac{\text{C}}{\text{E}}\right) \times \text{N} \]

Where:

D – The days of cash on hand.
C – The cash and cash equivalents.
E – The operating expenses.
N – The number of days in the period.

Definition

Days of Cash on Hand (D): The number of days a company can continue to pay its operating expenses using its available cash and cash equivalents.
Cash and Cash Equivalents (C): The total amount of cash and liquid assets available.
Operating Expenses (E): The total expenses incurred in the normal operations of the business.
Number of Days in the Period (N): The duration of the period in days.

Example

Let's say the cash and cash equivalents (C) are $50,000, the operating expenses (E) are $5,000, and the number of days in the period (N) is 30. Using the formula:

\[ \text{D} = \left(\frac{50,000}{5,000}\right) \times 30 = 10 \times 30 = 300 \]

So, the days of cash on hand is 300 days.