recreating cash account

[lichtgg]

Mark

existing default cash account is for some reason been compromised ?? and balances is off based on comparison to manual computation of individual assets in portfolio.

I want to recreate a new default cash account, however when doing so the cash additions (deposits) are being shown as redemptions (negative transaction) with stock purchases shown as additions (deposits) instead of reductions to cash.

in addition adjustments to the asset (stock) such as date or amount are not being updated in the cash account.

I have done something wrong but what??

thanks

[Mark]

Hi lichtgg,

The only way "automatic" cash transactions are recorded is if you have some investment designated as your "default cash account" in the sub-portfolio properties. If you do have this assigned, then when you buy something in that sub-portfolio, money will be taken out of your default cash investment. Likewise, if you sell, the proceeds are added to that investment. You might like to watch our Tutorial on Tracking Cash. Hopefully that will help.

[lichtgg]

mark
I think I follow what you have stated about purchases and sales in the investment account being posted in the default cash account as the transaction is entered.

My issue or failure is attempting to consolidate investments from multiple sub accounts into a single sub account. Investments moved into the existing sub portfolio are not seen by the cash account which you have stated is only made when the transaction is made at the investment account and the cash account is named as the default.

My attempt to get an accurate cash account with existing and added investments was facilitated by using the "recreate cash account" process. I added a new default cash account to the sub portfolio and ran the create process. The process resulted in double entries of each transaction in the default cash account. A BUY was posted as both a purchase and a redemption as was a SELL posted as both a purchase and redemption.

None of the 3 options were checked in the " recreate cash account" option.
thanks

[Mark]

Hi lichtgg,

Something doesn't sound quite right... It is correct that if you move an investment between sub-portfolios, there will be no effect on any default cash accounts. If you are using the "Recreate Default Cash Transactions" dialog that should add a default cash account entry for all investments in the selected sub-portfolio over the specified date range. You might want to start with something simple like a sub-portfolio with just 1 investment. Create a new/empty investment and assign it as the default cash account. Run this "Recreate Default Cash Transactions" command and make sure you see it working as you expect. You can then run this on a larger sub-portfolio. Keep in mind that if you already have transactions in a cash investment, it won't delete those, unless you check those options.

[chris319]

After watching the tutorial video, I first created a subportfolio for cash. I then created a new investment for cash.

When I tried to set up my default cash account, neither of the two cash accounts I had just created appeared in the dropdown list. Other securities I created as New Investments appeared in this list, but the two newly-created cash securities were nowhere to be found.

Friendly tip: "CASH" should never be used as the ticker symbol for a cash account because it is the ticker symbol for an actual company, Meta Financial Group, Inc., viz.:

https://finance.yahoo.com/quote/CASH?p=CASH&.tsrc=fin-srch

It would be preferable to use $CASH or CASH$.

[lichtgg]

Mark and ALL

so embarrassing...not enough sleep or stupid is as stupid does???

Thant said I had left the original cash account in the sub-portfolio, create a new cash account assigning it as default. The recreate process picked up the old cash account numbers along with the investment accounts and included them in the new default cash account which produced the crazy double entry results..

Removed the old cash account ran recreate and it is perfect!

[Mark]

After watching the tutorial video, I first created a subportfolio for cash. I then created a new investment for cash.

When I tried to set up my default cash account, neither of the two cash accounts I had just created appeared in the dropdown list. Other securities I created as New Investments appeared in this list, but the two newly-created cash securities were nowhere to be found.

Friendly tip: "CASH" should never be used as the ticker symbol for a cash account because it is the ticker symbol for an actual company, Meta Financial Group, Inc., viz.:

https://finance.yahoo.com/quote/CASH?p=CASH&.tsrc=fin-srch

It would be preferable to use $CASH or CASH$.

Hi chris319,

Are you looking in the sub-portfolio's properties of the sub-portfolio that contains the cash investment? Typically you don't need to create a sub-portfolio just for cash. You would have a sub-portfolio for each account, and all the investments as well as the cash investment go in that one sub-portfolio together, with the cash assigned as the default cash account in the Properties... of that sub-portfolio.

[chris319]

Hi Mark -

I have one subportfolio under "Master Portfolio". I set the Default Cash Account in that subportfolio to $CASH, which did appear in the dropdown list.

I then opened a Portfolio Value Report. The cash balance showed 0 shares at a price of $1. This is incorrect. With no cash deposited the cash balance should reflect four purchases plus the market value of those securities, and a margin interest charge which I inserted. The equity for each of the four positions is 0: the market value of the securities themselves plus a negative debit balance. The portfolio value should thus be negative (equal to the margin interest charged) but Fund Manager is showing a positive amount.

The correct portfolio value is -234.03, but Fund Manager shows a portfolio value of +28,037.37, off by over $28,000.

Please let me know if my explanation is not clear.

Thank you.

[Mark]

Hi chris319,

If you created the cash investment, or assigned it after recording the purchases, the cash will not have the corresponding default cash account entries recorded. They are only recorded if the default cash account is assigned at the time you record the transactions. You can either manually record the cash side of the transactions after the fact, or use the "File / File Operations / Re-Create Default Cash Transactions..." command. So, for example, if you bought $1,000 of some stock while a cash account wasn't assigned, you would need to record a $1,000 (1,000 shares at a price of $1) sell of cash on that date.

If a portfolio value is incorrect in a report, then one or more of your investment values is incorrect. If an investment value is incorrect, then the price or share balance of that investment is incorrect. If the share balance is incorrect, then one or more transactions are incorrect. The value of an investment is simply the price * shares, and the shares is simply a sum of all recorded transactions up through that date. Use the Data Register to see all your transactions in any investment. Once you have all the transactions recorded, verify each investment's value, and then the portfolio value will be correct too. Everything kind of builds on what it contains:

Portfolios contain investments, and investments contain transactions.

[chris319]

Hi Mark -

The problem I was having earlier was that I had entered the investments before setting up the cash subaccount.

I closed all of the investments and started afresh. I purchased 1,500 shares of CASH at $1 per share.

I then purchased 273 shares of XYZ (not actual ticker symbol) @ 55.05 per share and updated the price on line. Then I created a portfolio value report and got:

XYZ value: 0
CASH value: 0

This is incorrect. The account balances are:

XYZ value: 14,201.46 (price updated to 52.02)

Cash value: -13,528.65 (15028.65 margin loan - 1,500 cash balance)

The account value (equity) is thus 672.81.

Here is a handy little book which helped me to understand margin accounting:

https://www.amazon.com/NYIF-Vest-Pocket-Guide-Stock-Brokerage/dp/013847690X/ref=sr_1_1?dchild=1&keywords=stock+brokerage+math+rini&qid=1632513858&sr=8-1#customerReviews

[Mark]

Hi chris319,

In your Portfolio Value report, what is the date you've created it for? Is it after the date of your transactions? In the Portfolio Value report, how many shares of XYZ and CASH does it say you own? It sounds like it might be a date issue. Do you see your transactions that you recorded in the Data Register?

[chris319]

Hi Mark -

The report date was defaulting to th23rd and the transactions were defaulting to the 24th. That explains all zeroes.

With the report date set to the 24th the XYZ value is correct, but the cash value is not accounting for the margin loan, giving me an incorrect total.

[Mark]

What is your cash share balance? If you deposited $1,500 and bought some investment for $15,028.65 while having your default cash assigned, you should have a cash balance of -13,528.65. If you don't, look in the Data Register and make sure you have both of these transactions recorded. Did you assign the cash investment to be the default cash account under the properties of the sub-portfolio? If you didn't, you'll only see the $1,500 transaction.

[chris319]

Did you assign the cash investment to be the default cash account under the properties of the sub-portfolio? If you didn't, you'll only see the $1,500 transaction.

No, I didn't and that was the problem. I forgot to set that setting when I started over. I made the adjustment and now it's giving me an accurate portfolio value report.

May I suggest that the program come with the cash account preconfigured as we have done here? Not all users are going to drill down as I have, and if they haven't configured the program just so or missed these steps, they're going to have erroneous results. Those users who drill down will be back here for another exchange like we just had. If a user doesn't keep cash or a margin balance in his account he can simply zero it out without affecting his portfolio balance reports.

I think preconfiguring some of these things will help flatten the learning curve. Again, I urge you to read the book on Stock Brokerage Math I linked to in an previous post.

Thank you for your help and patience. I'm sure I'll have more later on.

[Mark]

Hi chris319,

Glad you got that working, and thanks for the feedback/ideas.