Cash and cash equivalents

Cash in hand, bank balances, and short-term investments of high liquidity and negligible risk, conventionally those maturing within three months.

A company with ₹260 crore in banks and ₹140 crore in liquid mutual funds usually reports ₹260 crore here, because Indian companies tend to carry liquid fund units in current investments. Add the ₹140 crore back when computing net debt, for ₹400 crore of cash and liquid investments.

Two adjustments matter before this figure is used in a net debt calculation. Cash held in a subsidiary the parent doesn't fully own is only partly the parent's shareholders', and cash that's restricted, whether as margin money, escrow, or unpaid dividend accounts, isn't available to repay debt. Both are disclosed.

Stop and look hard at a large cash balance sitting alongside large borrowings at a high interest rate. It can be a currency or jurisdiction constraint, and it can be a sign the cash isn't there in the way the balance sheet says. Several well-known frauds took that shape.