acalculator

What are our days cash on hand?

Enter the cash and investments on hand, the operating expenses for a year or another period, and the depreciation and amortization in them. The calculator shows how many days of cash operating expenses your reserves would pay for, as hospitals, nonprofits and lenders measure it.

Your numbers

Days cash on hand
84.2

$8,000,000.00 of cash and investments covers 84.2 days of cash operating expenses.

Cash operating expenses per day
$95,000.00
Cash and investments
$8,000,000.00

Days cash on hand: 84.2. $8,000,000.00 of cash and investments covers 84.2 days of cash operating expenses.

The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use

How to calculate

Computes days cash on hand: cash and investments divided by the cash operating expenses of one day (operating expenses minus depreciation and amortization, over the days in the period).

Example with the default inputs (Cash and cash equivalents $5,000,000.00, Marketable securities and investments $3,000,000.00, Operating expenses $36,500,000.00, Depreciation and amortization $1,825,000.00, Days in the period 365): $8,000,000.00 of cash and investments covers 84.2 days of cash operating expenses.

Method: Days cash on hand = (cash + marketable securities and investments) ÷ ((operating expenses − depreciation and amortization) ÷ days in the period).

  • Cash and investments are balances at the end of the period; the expenses are for the whole period.
  • Depreciation and amortization are taken out because they use no cash.
  • Arithmetic is exact on the typed decimals; days show to 1 decimal and money to the cent, halves up.

Machine-readable copies: Markdown, JSON.

Worked examples

Each example is checked against the calculator on every build.

  1. Cash and cash equivalents $5,000,000.00, Marketable securities and investments $3,000,000.00, Operating expenses $36,500,000.00, Depreciation and amortization $1,825,000.00, Days in the period 365 gives Days cash on hand 84.2, Cash operating expenses per day $95,000.00, Cash and investments $8,000,000.00.Source: California Department of Health Care Access and Information (HCAI), Financial Health of California Hospitals (days cash on hand = (cash + marketable securities + limited use cash + limited use investments) ÷ ((total operating expenses − depreciation and amortization expense from operations) ÷ days in reporting period)). https://hcai.ca.gov/visualizations/financial-health-of-california-hospitals/
  2. Cash and cash equivalents $1,200,000.00, Operating expenses $4,380,000.00, Days in the period 365 gives Days cash on hand 100, Cash operating expenses per day $12,000.00.Source: California Department of Health Care Access and Information (HCAI), Financial Health of California Hospitals (days cash on hand = (cash + marketable securities + limited use cash + limited use investments) ÷ ((total operating expenses − depreciation and amortization expense from operations) ÷ days in reporting period)). https://hcai.ca.gov/visualizations/financial-health-of-california-hospitals/
  3. Cash and cash equivalents $2,500,000.00, Marketable securities and investments $500,000.00, Operating expenses $9,300,000.00, Depreciation and amortization $300,000.00, Days in the period 90 gives Days cash on hand 30, Cash operating expenses per day $100,000.00.Source: California Department of Health Care Access and Information (HCAI), Financial Health of California Hospitals (days cash on hand = (cash + marketable securities + limited use cash + limited use investments) ÷ ((total operating expenses − depreciation and amortization expense from operations) ÷ days in reporting period)). https://hcai.ca.gov/visualizations/financial-health-of-california-hospitals/ (days in the reporting period)

How it works

  • Cash and investments = cash and cash equivalents + marketable securities and investments
  • Cash operating expenses per day = (operating expenses − depreciation and amortization) ÷ days in the period
  • Days cash on hand = cash and investments ÷ cash operating expenses per day

Rules:

  • Each amount is $0 or more and at most $1 quadrillion. Marketable securities and investments, and depreciation and amortization, may be left empty ($0).
  • The days in the period are a whole number from 1 to 366.
  • Operating expenses minus depreciation and amortization of $0 or less give no answer: "The operating expenses minus depreciation and amortization must be more than $0."
  • Days cash on hand too large to show as a number gives no answer: "Days cash on hand is too large to show as a number." One that is not 0 but too small to show: "Days cash on hand is too small to show as a number."
  • Daily expenses that are not 0 but too small to show as a number give no answer: "The daily expenses are too small to show as a number."
  • When more than one rule is broken, the message is the first of: the operating expenses rule, then days cash on hand, then the daily expenses.
  • The arithmetic is exact on the decimals you type. Days cash on hand shows to 1 decimal and money to the cent, with halves rounded up (away from 0).

Assumptions

  • Cash and investments are balances at the end of the period; the expenses are for the whole period.
  • Depreciation and amortization are the non-cash expenses included in the operating expenses.

Worked examples by hand

A year. Cash $5,000,000 and investments $3,000,000: $8,000,000. Operating expenses $36,500,000 with $1,825,000 of depreciation and amortization: (36,500,000 − 1,825,000) ÷ 365 = $95,000 a day. Days cash on hand = 8,000,000 ÷ 95,000 = 84.21…, shown as 84.2 days.

Cash only. Cash $1,200,000, operating expenses $4,380,000 a year, no depreciation: 4,380,000 ÷ 365 = $12,000 a day, and 1,200,000 ÷ 12,000 = 100 days.

A quarter of 90 days. Cash $2,500,000 and investments $500,000; operating expenses $9,300,000 with $300,000 of depreciation: (9,300,000 − 300,000) ÷ 90 = $100,000 a day, and 3,000,000 ÷ 100,000 = 30 days.

Other questions people ask

What is days cash on hand?

Days cash on hand is the number of days an organization could keep paying its operating expenses from the cash and investments it holds, with no money coming in. It is a common liquidity measure for hospitals: California's HCAI reports it for the state's hospitals.

How do I calculate days cash on hand?

Take the operating expenses for the period, subtract depreciation and amortization, and divide by the days in the period to get the cash expenses of one day. Then divide the cash and investments by that daily amount. $8,000,000 of cash and investments with $95,000 of cash expenses a day is 8,000,000 ÷ 95,000 = 84.2 days.

Why is depreciation subtracted?

Depreciation and amortization are expenses on the income statement, but they use no cash in the period. Taking them out leaves the expenses that cash must pay for, so the measure shows how long the cash would last.

Which cash and investments count?

California's HCAI counts cash, marketable securities, and limited-use cash and investments for hospitals. Another report or agreement may count only part of them, so check which definition it uses.

What days should I use for a quarter?

Use the days the operating expenses cover. For a quarter of 90 days, divide the quarter’s cash expenses by 90. For a year, use 365, or 366 in a leap year.

What is a good number of days cash on hand?

More days means more room to handle a slow month or a shock. What counts as enough depends on the sector, the size of the organization and any loan agreement that sets a minimum. Compare with your own past years and with similar organizations.