Cash and cash equivalents are vital for several reasons: - Liquidity: They provide the necessary liquidity to cover operational expenses and unexpected costs. - Financial Health: A healthy balance of CCE is often seen as an indicator of a company's financial health. - Creditworthiness: Having ample CCE can improve a company's credit rating, making it easier to obtain loans and other forms of financing. - Operational Efficiency: Efficient management of CCE can enhance operational efficiency by reducing the need for short-term borrowing.