cash reserves

Cash reserves are funds that an individual or organization sets aside in readily accessible accounts, like savings, tocover unexpected expenses or financial uncertainties. They act as a safety net, providing liquidity without the need to sell assets or incur debt. Maintaining adequate cash reserves helps ensure financial stability, allowing for smooth day-to-day operations and peace of mind during unforeseen situations. The amount kept in reserves depends on one’s financial situation, expenses, and risk tolerance. In business, cash reserves are vital for managing cash flow, funding growth, and weathering economic downturns.