<PAGE>
INVESTMENT ADVISER
Value Line, Inc.
220 East 42nd Street, New York, NY 10017-5891
DISTRIBUTOR
Value Line Securities, Inc.
220 East 42nd Street, New York, NY 10017-5891
CUSTODIAN BANK
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
SHAREHOLDER SERVICING AGENT
State Street Bank and Trust Company c/o NFDS
P.O. Box 419729, Kansas City, MO 64141-6729
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas, New York, NY 10036
LEGAL COUNSEL
Peter D. Lowenstein, Esq.
Two Greenwich Plaza, Suite 100
Greenwich, CT 06830
BOARD OF DIRECTORS
Jean Bernhard Buttner
Charles E. Reed Paul Craig Roberts
Leo R. Futia John W. Chandler
OFFICERS
Jean Bernhard Buttner
CHAIRMAN and PRESIDENT
David T. Henigson
VICE PRESIDENT, SECRETARY/TREASURER
Charles Heebner John W. Risner
VICE PRESIDENT VICE PRESIDENT
Jack M. Houston Stephen La Rosa
ASSISTANT ASSISTANT
SECRETARY/TREASURER SECRETARY/TREASURER
An investment in The Value Line Cash Fund, Inc. is not guaranteed or insured by
the U.S. Government, and there is no assurance that the Fund will maintain its
per-share net asset value.
This report is issued for the information of shareholders. It is not
authorized for distribution to prospective investors unless preceded or
accompanied by a currently effective prospectus of the Fund (obtainable from
the Distributor).
VLF #506105
-----------------
ANNUAL REPORT
DECEMBER 31, 1995
-----------------
THE
VALUE LINE
CASH FUND,
INC.
[Logo]
VALUE LINE
MUTUAL FUNDS
<PAGE>
[Logo] TO OUR VALUE LINE CASH FUND SHAREHOLDERS
- --------------------------------------------------------------------------------
DEAR SHAREHOLDER:
Money market funds returned to their traditional place in the investment
spectrum during 1995, providing solid, if unspectacular returns. Unlike 1994,
when cash holdings outperformed virtually all broad indexes of both stocks and
bonds, 1995 saw almost every other domestic investment sector outperform the
money funds.
For the year ended December 31, 1995, the yield for The Value Line Cash Fund,
Inc. was 5.40%. This was slightly above the average taxable money market fund
return of 5.37% for the year. For both the 7-day and 30-day periods ended
December 31, 1995, the yield was 5.18%. Total net assets of your Fund at year
end were $359.3 million; the average maturity of our holdings was 54 days,
versus 55 days at the end of 1994. The average maturity during the year ranged
from a high of 76 days in October to a low of 45 days in May.
The majority of the Fund's holdings remain in U.S. government agency securities
(53%). Recently, however, we have found attractive values in short-term
corporate and asset-backed securities, and we have increased our holdings in
these and other first-tier securities. ("First-tier" securities refer to those
assigned the highest rating by at least two nationally recognized rating
organizations--for example, P-1 by Moody's Investors Service and A-1 by Standard
& Poor's Corporation.) At present, we are not considering any new holdings with
ratings below first-tier level. In evaluating new commercial paper, we also look
for a minimum Safety Rank of 3 and a Financial Strength Rating of B or higher,
according to THE VALUE LINE INVESTMENT SURVEY.
Although the yield curve was positive (sloping upward) at the end of last year,
by midyear it had become flat. As noted in our semi-annual report of June 30,
1995, one-month rates were approximately equal to one-year rates at that time.
During the past six months, the yield curve has become inverted, with one-month
rates (5.37%) higher than one-year rates (5.06%). This inversion indicates that
the market expects further cuts in interest rates by the Federal Reserve Board.
Last January, the Federal Reserve raised the Federal Funds rate to 6.00%, it's
final increase in the current cycle. Responding to a slowing economy, the Fed
reversed course in July with a 0.25% rate cut, followed by another 0.25% cut in
mid-December. This trend has continued with an additional 0.25% rate cut as of
January 31st. (Please see the accompanying "Economic Observations" insert for
our current thinking on the economy and interest rates.)
We appreciate your confidence in The Value Line Cash Fund, and we look forward
to serving your investment needs in the future.
Sincerely,
/s/ Jean Bernhard Buttner
Jean Bernhard Buttner
CHAIRMAN AND PRESIDENT
February 7, 1996
2
<PAGE>
ECONOMIC OBSERVATIONS
The economy is continuing to slow. Indeed, whereas until recently it looked as
though the business expansion still had enough strength left in it for growth to
average well above 2% in 1996, the latest statistics paint a somewhat weaker
picture. For example, the nation's manufacturers report a continuing drop in
activity, while employment growth is down from where it was late last year.
Furthermore, American consumers are now less upbeat about the nation's near-term
prospects and their own situation than they were earlier in the expansion cycle.
All of this now suggests that the economy will grow by just over 1% in the
opening quarter of the year and by a bit less than 2% for the full 12 months.
There are good and bad sides to the current economic story. On the plus side is
the fact that slow growth will keep labor and materials shortages--which can
often lead to higher inflation--at bay. A slowing economy might also nudge the
Federal Reserve, which has already lowered interest rates three times since last
July, toward a still easier monetary stance in the months ahead, although this
scenario is by no means assured. The flip side of the equation is that a
softening economy is often a harbinger of a pending deceleration on the
corporate earnings front. The first indications of this profit slowdown, in
fact, may already be at hand.
For now, at least, our sense is that the current weakening in business will not
prove to be the opening act in a recession. Instead, we see several quarters of
weak growth followed by a modestly healthier pace of activity in 1997 and 1998.
At the same time, we do not envision a protracted drop in corporate profits, but
rather a several-quarter-long slowdown followed by a modest recovery later this
year or in 1997. All of this assumes, of course, that a workable budget
agreement will ultimately come out of Washington.
3
<PAGE>
SCHEDULE OF INVESTMENTS DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Principal
Amount Maturity Value
(IN THOUSANDS) Yield Date (IN THOUSANDS)
- --------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS (53.1%)
$ 5,000 Federal Farm Credit Banks. . . . . . . . . . . . . . . . . 5.63% 3/1/96 $ 5,000
18,000 Federal Farm Credit Banks. . . . . . . . . . . . . . . . . 5.90 (1) 5/9/96 17,998
20,000 Federal Farm Credit Banks. . . . . . . . . . . . . . . . . 5.83 (1) 5/24/96 19,998
15,000 Federal Farm Credit Banks. . . . . . . . . . . . . . . . . 5.65 (4) 8/12/96 14,989
10,250 Federal Farm Credit Banks. . . . . . . . . . . . . . . . . 5.87 10/25/96 10,251
10,000 Federal Farm Credit Banks. . . . . . . . . . . . . . . . . 5.63 (3) 11/27/96 9,993
1,000 Federal Farm Credit Banks. . . . . . . . . . . . . . . . . 4.34 (3) 2/12/97 994
25,000 Federal Home Loan Banks. . . . . . . . . . . . . . . . . . 5.70 (3) 8/5/96 24,983
5,000 Federal Home Loan Banks . . . . . . . . . . . . . . . . . 5.15 (2) 9/12/96 5,000
10,000 Federal Home Loan Banks . . . . . . . . . . . . . . . . . 5.59 (3) 9/25/96 9,996
5,000 Federal National Mortgage Association . . . . . . . . . . 5.59 7/1/96 4,996
10,000 Federal National Mortgage Association . . . . . . . . . . 4.20 9/4/96 10,012
10,000 Federal National Mortgage Association . . . . . . . . . . 5.81 (1) 9/27/96 10,000
5,000 Federal National Mortgage Association . . . . . . . . . . 5.81 10/4/96 5,000
3,000 Federal National Mortgage Association . . . . . . . . . . 4.57 (3) 10/25/96 3,000
10,000 Federal National Mortgage Association . . . . . . . . . . 5.90 (2) 11/15/96 9,997
9,100 Resolution Trust Funding Corp.
(zero coupon) . . . . . . . . . . . . . . . . . . . . . . 5.90 4/15/96 8,951
7,500 Student Loan Marketing Association . . . . . . . . . . . . 5.30 (2) 5/9/96 7,500
3,000 Student Loan Marketing Association . . . . . . . . . . . . 5.80 (3) 7/1/96 2,999
8,950 Student Loan Marketing Association . . . . . . . . . . . . 4.62 (3) 10/1/96 8,931
-------- --------
190,800 TOTAL U. S. GOVERNMENT AGENCY OBLIGATIONS. . . . . . . . . 190,588
-------- --------
COMMERCIAL PAPER (21.3%)
CHEMICAL-DIVERSIFIED (2.0%)
7,150 Air Products & Chemicals, Inc. . . . . . . . . . . . . . . 5.73 1/18/96 7,131
-------- --------
CHEMICAL-SPECIALTY (2.0%)
3,400 Lubrizol Corp. . . . . . . . . . . . . . . . . . . . . . . 5.89 1/12/96 3,394
3,600 Lubrizol Corp. . . . . . . . . . . . . . . . . . . . . . . 5.68 1/24/96 3,587
-------- --------
7,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,981
-------- --------
ELECTRIC UTILITY-EAST (2.0%)
7,000 Southern Company . . . . . . . . . . . . . . . . . . . . . 5.78 2/7/96 6,959
-------- --------
ELECTRONICS (2.0%)
7,300 Avnet, Inc.. . . . . . . . . . . . . . . . . . . . . . . . 5.82 1/19/96 7,279
-------- --------
4
<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Principal
Amount Maturity Value
(IN THOUSANDS) Yield Date (IN THOUSANDS)
- --------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
FINANCIAL SERVICES (2.0%)
$ 7,300 Commercial Credit Co.. . . . . . . . . . . . . . . . . . . 5.83% 1/26/96 $ 7,271
-------- --------
INSURANCE-LIFE (2.0%)
7,300 Travelers Insurance Co.. . . . . . . . . . . . . . . . . . 5.82 1/23/96 7,274
-------- --------
INSURANCE-PROPERTY/CASUALTY (1.4%)
5,000 Safeco Credit Co., Inc.. . . . . . . . . . . . . . . . . . 5.74 1/31/96 4,976
-------- --------
MACHINERY (3.9%)
7,000 Deere (John) Capital Corp. . . . . . . . . . . . . . . . . 5.48 5/31/96 6,843
7,300 Dover Corp.. . . . . . . . . . . . . . . . . . . . . . . . 5.78 1/17/96 7,281
-------- --------
14,300 14,124
-------- --------
METAL FABRICATING (2.0%)
7,300 Illinois Tool Works, Inc.. . . . . . . . . . . . . . . . . 5.83 1/23/96 7,274
-------- --------
NEWSPAPER (2.0%)
7,300 Gannett Co., Inc.. . . . . . . . . . . . . . . . . . . . . 5.79 1/23/96 7,274
-------- --------
76,950 TOTAL COMMERCIAL PAPER . . . . . . . . . . . . . . . . . . 76,543
-------- --------
CORPORATE SECURITIES (8.7%)
AUTO & TRUCK (1.9%)
7,000 Paccar Financial Corp. . . . . . . . . . . . . . . . . . . 5.83 9/20/96 6,998
-------- --------
BANK (3.9%)
7,000 Morgan (J.P.) & Co., Inc.. . . . . . . . . . . . . . . . . 5.85 (1) 3/8/96 7,000
7,000 Wachovia Bank of North Carolina, N.A.. . . . . . . . . . . 5.75 (3) 5/31/96 7,000
-------- --------
14,000 14,000
-------- --------
DIVERSIFIED CO. (2.0%)
4,500 General Electric Capital Corp. . . . . . . . . . . . . . . 5.96 (1) 6/6/96 4,500
2,500 General Electric Capital Corp. . . . . . . . . . . . . . . 5.95 (1) 6/7/96 2,500
-------- --------
7,000 7,000
-------- --------
FINANCIAL SERVICES (0.9%)
3,250 Associates Corp. N.A.. . . . . . . . . . . . . . . . . . . 8.75 2/1/96 3,257
-------- --------
31,250 TOTAL CORPORATE SECURITIES . . . . . . . . . . . . . . . . 31,255
-------- --------
5
<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Principal
Amount Maturity Value
(IN THOUSANDS) Yield Date (IN THOUSANDS)
- --------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
TAXABLE MUNICIPAL SECURITIES (8.3%)
$ 7,000 Arkansas, Development Financial
-------- Authority, Industrial Facilities
Revenue (Potlatch Corp. Projects),
Series 1995-B LOC--Credit Swiss (weekly put) . . . . . . . 5.95% (2) 8/1/30 $ 7,000
--------
6,000 De Kalb County, Georgia, Development
-------- Authority Revenue, Emory University
Project (Commercial Paper) . . . . . . . . . . . . . . . . 5.90 2/20/96 6,000
--------
3,000 Illinois Student Assistance
-------- Commission, Variable Rate Renewal,
Student Loan Revenue Bank, Ser. D
LOC--Sumitomo Bank (weekly put). . . . . . . . . . . . . . 6.16 (2) 9/1/23 3,000
--------
7,000 Mississippi Business Financial Corp.,
-------- Industrial Development Revenue Bonds,
Series 1994 (Bryan Foods, Inc.
Project), Guaranteed by Sara Lee Corp.
(weekly put) . . . . . . . . . . . . . . . . . . . . . . . 5.90 (2) 2/1/19 7,000
--------
6,900 State of Texas, Veterans Housing
-------- Assistance, Refunding Bonds,
Series 1994 A-2, G.O.---Pledge
(weekly put) . . . . . . . . . . . . . . . . . . . . . . . 5.86 (2) 12/1/33 6,900
--------
29,900 TOTAL TAXABLE MUNICIPAL SECURITIES . . . . . . . . . . . . 29,900
-------- --------
ASSET BACKED SECURITIES (6.1%)
7,000 Asset Backed Trust 1995, Ser. A-1. . . . . . . . . . . . . 5.96 (3) 12/10/96 7,000
-------- --------
7,500 Carco Auto Loan Master Trust,
-------- Class A-1, Money Market Extendible
Certificates, Series 1993-2 . . . . . . . . . . . . . . . 5.98 (3) 10/15/96 7,500
--------
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Value
Principal (IN THOUSANDS,
Amount Maturity EXCEPT PER-SHARE
(IN THOUSANDS) Yield Date AMOUNT)
- --------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
$ 1,653 Case Equipment Loan Trust, 1995-B,
-------- Class A-1, Money Market Notes
(monthly paydown, interest and
principal) . . . . . . . . . . . . . . . . . . . . . . . . 5.83% (3) 9/15/96 $ 1,653
--------
1,807 John Deere Owner Trust, 1995-A,
-------- Class A-1, Floating Rate (monthly
paydown, interest and principal) . . . . . . . . . . . . . 5.87 (3) 5/15/96 1,807
--------
4,040 Navistar Financial 1995-B Owner Trust
-------- Class A-1 (monthly paydown,
interest and principal). . . . . . . . . . . . . . . . . . 5.75 (3) 11/15/96 4,040
--------
22,000 TOTAL ASSET BACKED SECURITIES. . . . . . . . . . . . . . . 22,000
-------- --------
350,900 TOTAL INVESTMENTS (COST $350,286) (97.5%). . . . . . . . . 350,286
-------- --------
REPURCHASE AGREEMENTS (1.8%)
(INCLUDING ACCRUED INTEREST)
6,500 Collateralized by $4,810,000 U.S. Treasury Bonds
-------- 11 1/8%, due 8/15/03, with a value of $6,641,656
(with Morgan Stanley & Co., Inc., 5.87%, dated 12/29/95,
due 1/2/96, delivery value of $6,504,239). . . . . . . . . 6,503
EXCESS OF CASH AND OTHER ASSETS
OVER LIABILITIES (0.7%). . . . . . . . . . . . . . . . . . 2,554
--------
$357,400 NET ASSETS (100.0%). . . . . . . . . . . . . . . . . . . . $359,343
-------- --------
-------- --------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER OUTSTANDING SHARE. . . . . . . . . . . . . . . . $ 1.00
--------
--------
</TABLE>
Rate frequency for floating-rate notes at December 31, 1995:
(1) Daily (2) Weekly (3) Monthly (4) Quarterly
The yield shown on floating rate securities represents the rate at the end of
the reporting period. The maturity dates on these types of securities reflect
the final maturity dates.
SEE NOTES TO FINANICAL STATEMENTS
7
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES AT DECEMBER 31, 1995
<TABLE>
<CAPTION>
Dollars
(IN THOUSANDS EXCEPT
PER-SHARE AMOUNT)
--------------------
<S> <C>
ASSETS:
Investments at value:
(amortized cost $350,286). . . . . . . . . . . . . . . . . $350,286
Repurchase agreement . . . . . . . . . . . . . . . . . . . . 6,503
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Receivable for securities sold . . . . . . . . . . . . . . . 7,501
Interest receivable. . . . . . . . . . . . . . . . . . . . . 1,999
Receivable for capital shares sold . . . . . . . . . . . . . 2,215
--------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . 368,605
--------
LIABILITIES:
Payable for securities purchased . . . . . . . . . . . . . . 7,500
Payable for capital shares repurchased . . . . . . . . . . . 1,348
Accrued expenses:
Advisory fee . . . . . . . . . . . . . . . . . . . . . . . 121
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . 293
--------
TOTAL LIABILITIES. . . . . . . . . . . . . . . . . . . . . 9,262
--------
NET ASSETS:
Capital Stock, at $.10 par value (authorized
2 billion shares, outstanding 359,457,600
shares). . . . . . . . . . . . . . . . . . . . . . . . . . 35,946
Additional paid-in capital . . . . . . . . . . . . . . . . . 323,512
Undistributed net investment income. . . . . . . . . . . . . 101
Accumulated net realized loss on investments . . . . . . . . (216)
--------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . $359,343
--------
--------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER OUTSTANDING SHARE . . . . . . . . . . . . . . . . $ 1.00
--------
--------
</TABLE>
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Dollars
(IN THOUSANDS)
--------------
<S> <C>
INVESTMENT INCOME:
Interest income. . . . . . . . . . . . . . . . . . . . . . . $20,814
-------
EXPENSES:
Advisory fee . . . . . . . . . . . . . . . . . . . . . . . . 1,427
Transfer agent . . . . . . . . . . . . . . . . . . . . . . . 334
Printing, checks, and stationery . . . . . . . . . . . . . . 46
Telephone and wire charges . . . . . . . . . . . . . . . . . 44
Custodian fees . . . . . . . . . . . . . . . . . . . . . . . 40
Insurance and dues . . . . . . . . . . . . . . . . . . . . . 38
Registration and filing fees . . . . . . . . . . . . . . . . 35
Auditing and legal . . . . . . . . . . . . . . . . . . . . . 30
Postage and other expenses . . . . . . . . . . . . . . . . . 15
Directors' fees and expenses . . . . . . . . . . . . . . . . 12
-------
TOTAL EXPENSES . . . . . . . . . . . . . . . . . . . . . . 2,021
-------
NET INVESTMENT INCOME. . . . . . . . . . . . . . . . . . . . 18,793
-------
NET REALIZED GAIN ON INVESTMENTS . . . . . . . . . . . . . . 110
-------
NET INCREASE IN NET ASSETS
FROM OPERATIONS . . . . . . . . . . . . . . . . . . . . . . $18,903
-------
-------
</TABLE>
SEE NOTES TO FINANICAL STATEMENTS
8
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1995, AND 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
OPERATIONS:
Net investment income. . . . . . . . . . . . . . . $ 18,793 $ 12,663
Net realized gain (loss) on investments. . . . . . 110 (1,875)
-------- --------
Net Increase in Net Assets from Operations . . . . 18,903 10,788
-------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income. . . . . . . . . . . . . . . (18,740) (12,615)
-------- --------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares . . . . . . . . . 475,475 402,557
Net proceeds from reinvestment of
dividends. . . . . . . . . . . . . . . . . . . . 18,740 12,615
-------- --------
494,215 415,172
Cost of shares repurchased . . . . . . . . . . . . (476,667) (419,032)
-------- --------
Increase (decrease) from capital share
transactions . . . . . . . . . . . . . . . . . . 17,548 (3,860)
-------- --------
Increase due to voluntary capital contribution
from Adviser (note 4) . . . . . . . . . . . . . . -- 1,550
-------- --------
TOTAL INCREASE IN NET ASSETS . . . . . . . . . . . . . 17,711 (4,137)
NET ASSETS:
Beginning of year. . . . . . . . . . . . . . . . . 341,632 345,769
-------- --------
End of year. . . . . . . . . . . . . . . . . . . . $359,343 $341,632
-------- --------
-------- --------
UNDISTRIBUTED NET INVESTMENT INCOME AT END OF YEAR . . $ 101 $ 48
-------- --------
-------- --------
</TABLE>
SEE NOTES TO FINANICAL STATEMENTS
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940, as amended, as
an open-end, diversified management investment company. The following
significant accounting policies are in conformity with generally accepted
accounting principles for investment companies. Such policies are consistently
followed by the Fund in the preparation of its financial statements. Generally
accepted accounting principles may require management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results may differ from those estimates.
(A) SECURITY VALUATION. Securities held by the Fund are valued on the basis of
amortized cost, which approximates market value and does not take into account
unrealized gains or losses. This involves valuing an instrument at cost and
thereafter assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument.
The valuation of securities based upon their amortized cost is permitted by Rule
2a-7 under the Investment Company Act of 1940. The rule requires that the Fund
maintain a dollar-weighted average portfolio maturity of 90 days or less,
purchase instruments that have remaining maturities of 13 months or less only,
and invest only in securities determined by the Board of Directors to be of good
quality with minimal credit risks. The Directors have established procedures
designed to achieve this objective.
(B) REPURCHASE AGREEMENTS. In connection with transactions in repurchase
agreements, the Fund's custodian takes possession of the underlying collateral
securities, the value of which exceeds the principal amount, including accrued
interest, of the repurchase transaction. To the extent that any repurchase
transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to ensure the adequacy of the collateral. In
the event of default of the obligation to repurchase, the Fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral proceeds may be subject to legal proceedings.
(C) SECURITY TRANSACTIONS. Security transactions are accounted for on the date
the securities are purchased or sold. In computing net investment income,
premiums and discounts on portfolio securities are amortized. Realized gains and
losses on securities transactions are determined on the identified-cost method.
(D) FEDERAL INCOME TAXES. It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies, including the distribution requirements of the Tax Reform Act of
1986, and to distribute, on a daily basis, all of its taxable income to its
shareholders. Therefore, no Federal income-tax or excise-tax provision is
required.
2. DIVIDENDS, DISTRIBUTIONS TO SHAREHOLDERS AND CAPITAL SHARE TRANSACTIONS
The Fund earns interest daily on its investments and will distribute daily on
each day the Fund is open for business all of its net investment income. Net
realized gains, if any, will be distributed once a year. Earnings for Saturdays,
Sundays, and holidays are paid as a dividend on the next business day. All such
distributions are automatically credited to shareholder accounts in additional
shares at net asset value of the day declared.
Because the Fund has maintained a $1.00 net asset value per share from
inception, the number of shares sold, shares issued to shareholders in
reinvestment of dividends declared, and shares repurchased are equal to the
dollar amounts shown in the Statement of Changes in Net Assets for the
corresponding capital-share transactions.
10
<PAGE>
3. TAX INFORMATION
At December 31, 1995, the aggregate cost of investments in securities for
Federal income-tax purposes is approximately $350,286,000. At December 31, 1995,
there is no appreciation or depreciation of investments.
For Federal income-tax purposes, the Fund utilized approximately $110,000 of its
capital-loss carryover to offset a realized gain during the year ended December
31, 1995. The Fund had a net capital-loss carryover at December 31, 1995 of
approximately $216,000, which will expire in the year 2002. To the extent future
capital gains are offset by such capital losses, the Fund does not anticipate
distributing any such gains to the shareholders.
4. INVESTMENT ADVISORY CONTRACT, MANAGEMENT FEES, AND TRANSACTIONS WITH
AFFILIATES
An advisory fee of $1,427,274 was paid or payable to Value Line, Inc. (the
"Adviser"), the Fund's investment adviser, for the year ended ended December 31,
1995. This was computed at the rate of 4/10 of 1% per year of the average
daily net asset value of the Fund during the year and paid monthly. The Adviser
provides research, investment programs, and supervision of the investment
portfolio and pays costs of administrative services, office space, and equipment
and compensation of administrative, bookkeeping, and clerical personnel
necessary for managing the affairs of the Fund. The Adviser also provides
persons, satisfactory to the Fund's Board of Directors, to act as officers of
the Fund and pays their salaries and wages. The Fund bears all other costs and
expenses. If the aggregate expenses of the Fund, other than taxes, interest,
brokerage commissions, and extraordinary expenses, exceed the expense limitation
imposed by any state in which the Fund sells its shares, the management fee will
be reduced by the amount of such excess, or the amount of such excess will be
refunded. Presently, the most restrictive limitation is 2.5% of the first $30
million of the average daily net assets, 2% of the next $70 million and 1.5% on
any excess over $100 million. No such reimbursement was required for the year
ended December 31, 1995.
A fee of $5,760 for printing services was payable to the Adviser for the period
ended December 31, 1995.
Certain officers and directors of the Adviser and its subsidiary, Value Line
Securities, Inc. (the Fund's distributor and a registered broker/dealer), are
also officers and directors of the Fund.
The Adviser and/or affiliated companies and the Value Line, Inc. Profit Sharing
and Savings Plan owned 51,760,803 shares of the Fund's capital stock,
representing 14.40% of the outstanding shares, at December 31, 1995. In
addition, certain officers and directors of the Fund owned 1,636,471 shares of
the Fund, representing .46% of the outstanding shares.
During the year ended December 31, 1994, the market value of certain of the
Fund's securities declined as interest rates rose. In order to maintain a $1.00
net asset value per share and continue valuing the Fund's portfolio in
accordance with Rule 2a-7, certain securities were purchased from the Fund by
the Adviser. The Adviser puchased such securities from the Fund at their market
value of $38,612,000 and reimbursed the Fund for losses of $1,550,337 resulting
from the difference between the market value of the securities and their
amortized cost of $40,162,337. For tax purposes, these reimbursements were
applied against the realized losses for the year ended December 31, 1994.
11
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------
1995 1994 1993 1992 1991
------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR . . . . . . . . . . . . . . . . . . . . $1.000 $1.000 $1.000 $1.000 $1.000
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . .054 .037 .031 .037 .059
Dividends from net investment income . . . . . . . . . . . . . . . . . . (.054) (.037) (.031) (.037) (.059)
------------------------------------------------
Net realized loss on securities. . . . . . . . . . . . . . . . . . . . . - (.005) - - -
------------------------------------------------
Voluntary capital contribution from Adviser (note 4) . . . . . . . . . . - .005 - - -
------------------------------------------------
Change in net asset value. . . . . . . . . . . . . . . . . . . . . . . . - - - - -
------------------------------------------------
NET ASSET VALUE, END OF YEAR . . . . . . . . . . . . . . . . . . . . . . . $1.000 $1.000 $1.000 $1.000 $1.000
------------------------------------------------
------------------------------------------------
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.40% 3.69% 3.06% 3.74% 5.89%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in thousands) . . . . . . . . . . . . . . . . . . $359,343 $341,632 $345,769 $415,190 $438,218
Ratio of expenses to average net assets. . . . . . . . . . . . . . . . . . .57% .61% .60% .60% .58%
Ratio of net investment income to
average net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.27% 3.63% 3.02% 3.67% 5.74%
</TABLE>
SEE NOTES TO FINANICAL STATEMENTS
12
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
OF THE VALUE LINE CASH FUND, INC.
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Value Line Cash Fund, Inc. (the
"Fund") at December 31, 1995, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended, and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards, which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial-statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 1995, by correspondence with the custodian and brokers and the
application of alternative auditing procedures where confirmations from brokers
were not received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 AVENUE OF THE AMERICAS
NEW YORK, NY 10036
February 16, 1996
13
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14
<PAGE>
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15
<PAGE>
THE VALUE LINE FAMILY OF FUNDS
- --------------------------------------------------------------------------------
1950 -- THE VALUE LINE FUND seeks long-term growth of capital along with modest
current income by investing substantially all of its assets in common stocks or
securities convertible into common stock.
1952 -- THE VALUE LINE INCOME FUND'S primary investment objective is income, as
high and dependable as is consistent with reasonable growth. Capital growth to
increase total return is a secondary objective.
1956 -- THE VALUE LINE SPECIAL SITUATIONS FUND seeks to obtain long-term growth
of capital by investing not less than 80% of its assets in "special situations."
No consideration is given to achieving current income.
1972 -- VALUE LINE LEVERAGED GROWTH INVESTORS' sole investment objective is to
realize capital growth by investing substantially all of its assets in common
stocks. The Fund may borrow up to 50% of its net assets to increase its
purchasing power.
1979 -- THE VALUE LINE CASH FUND, a money market fund, seeks high current income
consistent with preservation of capital and liquidity.
1981 -- VALUE LINE U.S. GOVERNMENT SECURITIES FUND seeks maximum income without
undue risk to principal. Under normal conditions, at least 80% of the value of
its assets will be invested in issues of the U.S. Government and its agencies
and instrumentalities.
1983 -- VALUE LINE CENTURION FUND* seeks long-term growth of capital as its sole
objective by investing primarily in stocks ranked 1 or 2 by Value Line for
year-ahead relative performance.
1984 -- THE VALUE LINE TAX EXEMPT FUND seeks to provide investors with maximum
income exempt from federal income taxes while avoiding undue risk to principal.
The Fund offers investors a choice of two portfolios: a Money Market Portfolio
and a High-Yield Portfolio.
1985 -- VALUE LINE CONVERTIBLE FUND seeks high current income together with
capital appreciation primarily from convertible securities ranked 1 or 2 for
year-ahead performance by the Value Line Convertible Ranking System.
1986 -- VALUE LINE AGGRESSIVE INCOME TRUST seeks to maximize current income by
investing in high-yielding, lower-rated, fixed-income securities.
1987 -- VALUE LINE NEW YORK TAX EXEMPT TRUST seeks to provide New York
taxpayers with maximum income exempt from New York State, New York City, and
federal income taxes while avoiding undue risk to principal.
1987 -- VALUE LINE STRATEGIC ASSET MANAGEMENT TRUST* invests in stocks, bonds,
and cash equivalents according to computer trend models developed by Value Line.
The objective is to professionally manage the optimal allocation of these
investments at all times.
1992 -- VALUE LINE INTERMEDIATE BOND FUND seeks high current income consistent
with low volatility of principal by investing primarily in a diversified
portfolio of investment-grade debt securities.
1993 -- VALUE LINE SMALL-CAP GROWTH FUND invests primarily in common stocks or
securities convertible into common stock, with its primary objective being
long-term growth of capital.
1993 -- VALUE LINE ASSET ALLOCATION FUND seeks high total investment return,
consistent with reasonable risk. The Fund invests in stocks, bonds, and money
market instruments utilizing quantitative modeling to determine the correct
asset mix.
1995 -- VALUE LINE U.S. MULTINATIONAL COMPANY FUND'S investment objective is
maximum total return. It invests primarily in securities of U.S. companies that
have significant sales from international operations.
* ONLY AVAILABLE THROUGH THE PURCHASE OF THE GUARDIAN INVESTOR, A TAX-DEFERRED,
VARIABLE ANNUITY, OR VALUEPLUS, A VARIABLE LIFE INSURANCE POLICY.
- --------------------------------------------------------------------------------
FOR MORE COMPLETE INFORMATION ABOUT ANY OF THE VALUE LINE FUNDS, INCLUDING
CHARGES AND EXPENSES, SEND FOR A PROSPECTUS FROM VALUE LINE SECURITIES, INC.,
220 EAST 42ND STREET, NEW YORK, NEW YORK 10017-5891 OR CALL 1-800-223-0818,
24 HOURS A DAY, 7 DAYS A WEEK. READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
16
