Cash at end of period
Also known as: closing cash balance, ending cash balance
Cash at end of period is the closing cash and cash equivalents balance at the reporting date, calculated as plus the during the period (a quarter or a full year). It must reconcile exactly to the line on the , serving as the mechanical link that confirms the internal consistency of the three financial statements.
It is the final line of the and the one figure that directly connects the to the . This completes the articulation of the financial statements where flows from the into on the and the ending cash balance flows from the bottom of the into .
The closing cash balance is the starting point for analysis. In isolation it reveals the absolute level of immediately accessible funds the company holds at the reporting date. Its analytical value is greatly enhanced by reading it relative to the company's monthly cash burn rate, near-term debt maturities, undrawn credit facility availability, and seasonal cash flow patterns that may cause the balance to fluctuate materially between reporting dates.
A closing cash balance that appears comfortable at a quarter end can mask a business that regularly draws its to near zero mid-period before receiving large customer payments. Conversely a seemingly thin closing balance at a company with strong and predictable operating cash inflows in the following weeks represents far less risk than the headline figure suggests.
For companies operating across multiple currencies the closing cash balance on the reflects the retranslated value of all cash holdings at the period end exchange rate. Movements in the closing balance between periods can therefore reflect currency translation effects as well as genuine cash generation or consumption. Separating the two requires reference to the foreign exchange adjustment line presented between the financing section and the closing balance.