Cash Buffer Days: Did You Know?
Fifty percent of firms had fewer than 15 cash buffer days, and only 40% had more than three weeks.1
Current Take: COVID-19
The adequate management of cash flow will help create a cash contingency that has never been more critical for smaller businesses.
Cash buffer days refers to the number of days a business could cover its expenses without any revenue. The amount of cash you have on hand as a safety net is an important measure of your ability to weather a crisis. The JPMorgan Chase Institute’s recent report “Small Business Cash Liquidity in 25 Metro Areas” shows that half of all firms have only enough cash on hand for 15 days. It’s important to build up that buffer so that bumps in the road don't become roadblocks to success.
The amount of cash you have on hand is an important measure. This content will help you learn how to operate so you’ll have enough cash to be prepared for downturns or opportunities.
1 Reflects data from the JPMorgan Chase Institute’s recent report “Small Business Cash Liquidity in 25 Metro Areas”
For Informational/Educational Purposes Only: The author’s views may differ from other employees and departments of JPMorgan Chase & Co. Views and strategies described may not be appropriate for everyone, and are not intended as specific advice/recommendation for any individual. You should carefully consider your needs and objectives before making any decisions, and consult the appropriate professional(s). Outlooks and past performance are not guarantees of future results.