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cash on hand. Definition. Funds that are immediately available to a business, and can be spent as needed, as opposed to assets that must be sold to generate cash. The amount of cash on hand determines what projects a company can undertake, or what financial hardships can be absorbed, without going into debt or arranging other financing.
The cash-on-cash return is calculated by dividing the before-tax cash flow by the amount of cash invested (or down payment) and is expressed as a percentage. The cash-on-cash return is only one of several very important return ratios that measure the profitability of an income-producing property. For example when you purchase a rental property, you might put down only 20% for a cash down payment, plus some renovations.