and Banker's Acceptances. Cash equivalents on balance sheets include securities (e.g., notes) that mature within 90 days. Cash budget A forecasted summary of a firm's expected cash inflows and cash outflows as well as its expected cash and loan balances. Cash & carry Applies to derivative products. Combination of a long position in a stock/index/commodity and short position in the underlyingfutures, which entails a cost of carry on the long position. Also known as cash and carry arbitrage. Cash commodity The actual physical commodity, as distinguished from a futures contract. Cash conversion cycle The length of time between a firm'spurchase of inventory and the receipt of cash from accounts receivable. Cash cow A company that pays out most of its earnings per share to stockholders as dividends. Or, a company or division of a company that generates a steady and significant amount of free cash flow. Cash cycle In general, the time between cash disbursement and cash collection. In networking capital management, it can be thought of as the operating cycle less the accounts payable payment period. Cash deficiency agreement An agreement to investcash in a project to the extent required to cover any cash deficiency the project may experience. Cash delivery The provision of some futures contracts that requires not delivery of underlying assets but settlement according to the cash value of the asset. Cash discount An incentive offered to purchasers of a firm's product for payment within a specified time period, such as ten days. Cash dividend A dividend paid in cash to a company'sshareholders. The amount is normally based on profitability and is taxable as income. A cashdistribution may include capital gains and return of capital in addition to the dividend. Cash earnings A firm'scash revenues less cash expenses, which excludes the costs of depreciation. Cash-equivalent items Examples include Treasury bills and Banker's Acceptances. Cash flow In investments, cash flow represents earnings before depreciation, amortization, and non-cash charges. Sometimes called cash earnings. Cash flow from operations (called funds from operations by real estate and other investment trusts) is important because it indicates the ability to pay dividends. Cash flow after interest and taxes Net income plus depreciation. Cash flow break-even point The point below which the firm will need either to obtain additional financing or to liquidate some of its assets to meet its fixed costs. Cash flow per common share Cash flow from operations minus preferred stockdividends, divided by the number of common sharesoutstanding. Cash flow coverage ratio The number of times that financial obligations (for interest, principal payments, preferred stockdividends, and rental payments) are covered by earnings before interest, taxes, rental payments, and depreciation. Cash flow matching Also called dedicating a portfolio, this is an alternative to multiperiod immunization that calls for the manager to match the maturity of each element in the liability stream, working backward from the last liability to assure all required cash flows. Cash flow from operations A firm'snetcash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuingsecurities), calculated