CASH RESERVE Meaning and
Definition
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A cash reserve refers to a predetermined amount of money or funds set aside and held by individuals, businesses, or financial institutions to provide a safety net for emergencies or unexpected expenses. It represents the liquid assets that are readily available, usually in the form of cash or easily convertible investments, to meet immediate financial obligations.
Typically, a cash reserve is built up by allocating a portion of income or profits, and is intended to provide a cushion against financial hardships, such as job loss, unplanned medical expenses, or business disruptions. It acts as a buffer against unforeseen circumstances, allowing individuals or organizations to cover essential expenses without resorting to borrowing or depleting other assets.
For individuals, a cash reserve serves as a means to maintain their day-to-day livelihood and cover essential bills during periods of financial uncertainty or unexpected events. On the other hand, businesses establish cash reserves to ensure they can meet their short-term obligations, sustain operations during economic downturns, and seize opportunities for growth or expansion.
Having a cash reserve acts as a financial safety valve, enabling individuals and businesses to manage unexpected financial setbacks without causing significant disruptions to their daily lives or operations. The size of a cash reserve varies depending on the individual or organization's financial needs, risk tolerance, and specific circumstances. It is considered a prudent financial strategy to hold a cash reserve to mitigate potential financial risks and ensure stability and resilience in the face of unforeseen events.
Common Misspellings for CASH RESERVE
- xash reserve
- vash reserve
- fash reserve
- dash reserve
- czsh reserve
- cssh reserve
- cwsh reserve
- cqsh reserve
- caah reserve
- cazh reserve
- caxh reserve
- cadh reserve
- caeh reserve
- cawh reserve
- casg reserve
- casb reserve
- casn reserve
- casj reserve
- casu reserve
- casy reserve
Etymology of CASH RESERVE
The word "cash" originally comes from the Middle French word "caisse", meaning "money box" or "chest". It further originates from the Provençal word "caissa" and the Italian word "cassa", which both have similar meanings. The term "reserve" is derived from the Latin word "reservare", meaning "to keep back", "to retain", or "to preserve". In the context of financial terminology, "reserve" refers to a stock or supply of money or assets held for a specific purpose. So, the etymology of "cash reserve" combines the idea of a storage container for money or assets with the notion of holding back or preserving a certain amount for future use.
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