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What is Ledger Cash?

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  • Written By: A. Leverkuhn
  • Edited By: Andrew Jones
  • Last Modified Date: 24 September 2016
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In the accounting world, ledger cash is the amount of money that a company has available to pay bills or invest in expansion. It is called ledger cash because it is based on recorded documentation. Ledger cash is also called book cash. It is part of common corporate accounting. This money can be recorded in a book or with electronic tools like spreadsheets.

Publicly traded companies have to provide for this kind of financial measurement as part of a periodic accounting audit. This kind of estimate also helps a company to evaluate its own internal structure and corporate health. Ledger cash is a vital sign of how well a company is doing. It shows the extent of that company’s abilities to navigate its future. Company leadership often uses book cash estimates as part of informational presentations for shareholder groups as well as in presentations to workers about the financial health of their employer.

To some accounting managers, ledger or book cash is part of a greater system of evaluating a company. Something called cash-on-hand helps leaders monitor the financial health of their businesses. Cash on hand is a ratio of ledger cash that shows how well a company is set up for facing financial challenges. Some businesses also use a “number of days of cash on hand” model to simulate how long the business could survive with no additional revenue streams coming in.

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All of this business accounting is vital to understanding what happens behind the doors of a company or enterprise. Skilled accountants work on behalf of company leadership to provide accurate accounts of ledger cash and other crucial statistics. A company will often undergo a periodic audit where these numbers are checked against concrete realities by skilled external auditors.

The concept of ledger cash represents the synergy between traditional bookkeeping methods and the particular features of today’s more complicated business world. Although complex computer modeling has made today’s businesses more versatile, they still rely on concrete cash accounting methods as an underlying measure of their worth and ability. Some analysts foresee danger in loosening requirements on book cash accounting and similar valuations for businesses. To many in the business world, ledger cash counting and similar traditions are part of the backbone of the modern business community, and critical markers in the often chaotic landscape of publicly traded businesses, as well as smaller local corporations and enterprises.

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