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 reports ₹400 crore.

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

The pattern worth pausing on is 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 is not there in the way the balance sheet says. Several well-known frauds took exactly that shape.