Cash and cash equivalents

For investors and companies cash and cash equivalents are generally counted to be "low risk and low return" investments and sometimes analysts can estimate company's ability to pay its bills in a short period of time by comparing CCE and current liabilities.

The opportunity cost of saving up CCE is the return on equity that company could earn by investing in a new product or service or expansion of business.

For instance, if a company spends $300 on purchasing goods, this is recorded as $300 increase to its supplies and decrease in the value of CCE.

Restricted cash can be also set aside for other purposes such as expansion of the entity, dividend funds or "retirement of long-term debt".

Based on the customer contract the manufacturer should put the deposit into separate bank account and not withdraw or use the money until the equipment is shipped and delivered.