The amount of cash listed on a company's balance sheet includes its physical currency, bank accounts and undeposited checks. Maintaining a strong cash balance provides a cushion in case a company's business suffers a temporary setback. A company reports its cash balance in the "Current Assets" section of its balance sheet, the section that shows assets expected to be converted to cash or used within a year. If you are provided all the other items in the current assets section of the balance sheet and the amount of total current assets, you can solve for the amount of a company's cash.
Find the amounts of the noncash items, such as short-term investments, accounts receivable, inventory and supplies, in the "Current Assets" section of a company's balance sheet. For example, assume the company's balance sheet shows $50,000 in short-term investments, $60,000 in accounts receivable, $10,000 in inventory and $5,000 in supplies.
Calculate the sum of the noncash current assets. In this example, calculate the sum of $50,000, $60,000, $10,000 and $5,000, which equals $125,000 in noncash current assets.
Find the amount of the company's total current assets listed at the bottom of the "Current Assets" section of its balance sheet. In this example, assume the company shows $200,000 in total current assets.
Subtract the amount of noncash current assets from total current assets to calculate the company's cash balance. In this example, subtract $125,000 from $200,000 to get $75,000 in cash.
Track a company’s cash balance over time to identify any changes. A growing cash balance suggests a company may be improving its performance and generating more sales.
Compare a company’s cash balance with the cash balances of other companies in its industry. A company with a higher cash balance may be in a better competitive position to invest in new technology or acquire other companies.