war chest

noun
Updated on: 26 Jul 2017

Definition of war chest

  1. :  a fund accumulated to finance a war; broadly :  a fund earmarked for a specific purpose, action, or campaign

Examples of war chest in a Sentence

  1. The candidate held fund-raising dinners to build up his war chest.

First Known Use of war chest

1871


Financial Definition of WAR CHEST

war chest

What It Is

A war chest is the cash set aside to deal with unexpected changes in a business environment or to take advantage of a sudden opportunity.

How It Works

Uncertainties, unexpected events and opportunities occur regularly in business environments.  In most cases, these events cost money or jeopardize revenues. The ability of a business to handle these unexpected cash needs may mean the difference between success and failure, between new growth and missed opportunities. For example, a business may use a war chest to attempt a takeover of a competitor.

Companies may accumulate cash in a reserve account to handle such contingencies. This cash account, which may be invested in short term and liquid investments, is referred to as a "war chest."

Why It Matters

A company may consider that its ability to quickly borrow cash to handle a contingency is a critical element of its cash management process. The events that cause the need for the cash unexpectedly may create a difficulty for the business in borrowing from a lender.


WAR CHEST Defined for English Language Learners

war chest

noun

Definition of war chest for English Language Learners

  • : an amount of money that can be used by a government to pay for a war

  • : an amount of money intended for a specific purpose, action, or campaign

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