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What are the different types of cash assets and the basic objectives for holding each?

What are the different types of cash assets and the basic objectives for holding each?

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Cash assets refers to cash on hand or bank and the assets which can be easily converted into cash by selling them. The types of cash assets are cash which is readily available with the company and marketable short term securities which can be easily sold in the market and convert into cash.

The basic objective of holding cash asset for the company is that company can have liquidity and pay its expenses or any other liabilities or require cash for any unexpected transactions. This will save the company from liquidity issue since cash assets are the most liquid assets.

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