In a previous post we discussed an inconsistency in our Cash , CashEquiv , and CashPS line items. We have to take some corrective actions, as well as understand the source of the confusion. To clarify
Cash means cash in the bank + “equivalents” like CD’s CashEquiv is Cash + Short Term Investments or STI
Part of the confusion is the unfortunate choice of the term ‘Equiv’ which in fact represents STI. For example META has CashPSQ of $4.54 and CashEquivPSQ of $14.51. So using one vs the other can be a huge difference.
We need to take corrective actions to remove inconsistencies, and preferably avoid changing your backtested results. But we need to understand what you meant when you wrote the formulas. There are two elephants in the room that cover 99% of the formulas:
CashPSQ is used 57K+ times
CashEquivPSQ is used 25K+ times
We strongly think that users that have CashPSQ in formulas really meant CashEquivPSQ
Please let us know so we can decide the course of action to fix inconsistency and how to avoid confusion.
Perhaps there’s no confusion. I just can’t imagine anyone wanting to use Cash instead of CashEquiv. Yet the majority uses Cash. Why? Too much cash in the bank is stupid from a biz perspective and does not represent the liquidity of a company. We want to minimize user error wherever we can.
Of course we need to fix the inconsistency introduced when we added CashPS (we will likely deprecate CashPS since it’s no longer necessary now that we have auto generated factors)
We also need to fix our own confusion. Here’s META Snapshot. The $4.54 is just Cash, but the $37B is CashEquiv ( $14.51 per share) yet they are both called “cash”
