# What are our days cash on hand?

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).

- Page: https://www.acalculator.org/finance/days-cash-on-hand-calculator
- JSON spec: https://www.acalculator.org/finance/days-cash-on-hand-calculator.json
- Version: c3f22e373893

## Default answer

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.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| cash | Cash and cash equivalents | Cash in the bank and short-term deposits at the end of the period. |
| inv | Marketable securities and investments | Optional: investments that can be turned into cash, including limited-use cash and investments you count. |
| opex | Operating expenses | Total operating expenses for the period. |
| da | Depreciation and amortization | Optional: the non-cash expenses included in the operating expenses. |
| days | Days in the period | The days the operating expenses cover: 365 for a year, 366 for a leap year, about 91 for a quarter. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| dch | Days cash on hand | Cash and investments ÷ cash operating expenses per day, to 1 decimal. |
| daily | Cash operating expenses per day | (Operating expenses − depreciation and amortization) ÷ days in the period. |
| reserves | Cash and investments | Cash and cash equivalents + marketable securities and investments. |

## Method

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

## Assumptions

- 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.

## Worked examples

1. cash = $5,000,000.00, inv = $3,000,000.00, opex = $36,500,000.00, da = $1,825,000.00, days = 365 gives dch = 84.2, daily = $95,000.00, reserves = $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 = $1,200,000.00, opex = $4,380,000.00, days = 365 gives dch = 100, daily = $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 = $2,500,000.00, inv = $500,000.00, opex = $9,300,000.00, da = $300,000.00, days = 90 gives dch = 30, daily = $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).

## FAQ

### 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.

## Sources

- California Department of Health Care Access and Information (HCAI), Financial Health of California Hospitals: days cash on hand is the number of days a hospital can cover operating expenses from existing cash with no more money coming in; (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/ (retrieved 2026-10-19)