- --------------------------------------------------------------------------------
ANNUAL REPORT
- --------------------------------------------------------------------------------
December 31, 1997
- --------------------------------------------------------------------------------
The Value Line
Cash Fund, Inc.
[LOGO]
----------------
VALUE LINE
No-Load
Mutual
Funds
<PAGE>
The Value Line Cash Fund, Inc.
To Our Value Line
- --------------------------------------------------------------------------------
To Our Shareholders:
The year 1997 was another solid one for The Value Line Cash Fund, whose total
return for the year was 5.10%, exceeding by a significant margin the average
money market fund's return for the same period of 4.90%. We attribute this
outperformance to prudent security selection and a reasonable fee structure. As
of December 31, 1997, the Fund's total net assets were $303.1 million, and the
average days to maturity were 82.
Your Fund continues to emphasize securities of the highest quality, as U.S.
Government Agency Obligations remain the largest classification of the Fund's
holdings (28.9%). Recent adjustments to the Fund's holdings include increasing
the allocation to Asset-Backed securities (20.3%) as we believe Asset-Backeds
are excellent first-tier investments because of their relatively high yields,
excellent credit quality, and diversification benefits. ("First-tier" securities
refer to those assigned the highest rating by at least two nationally recognized
organizations--for example, P-1 by Moody's Investors Service and A-1 by Standard
& Poor's Corporation.) No investments with ratings below the first-tier level
are currently being considered. In addition, any commercial paper issuer
evaluated by The Value Line Investment Survey must carry a minimum Safety rank
of 3 and a Financial Strength Rating of B, or higher.
The fixed-income markets experienced substantial rate gyrations in 1997. In
March, the Federal Reserve's Open Market Committee increased the Federal Funds
rate by 0.25% to 5.50%, in response to strong economic data and Federal Reserve
Chairman Alan Greenspan's desire to be both vigilant and preemptive against
rising inflation. Soon after, short- and long-term rates peaked for the year as
market participants responded to the Fed's actions. As the year progressed and
the feared inflation never materialized, bond buyers emerged and rates fell
throughout the remainder of 1997. Deflationary turmoil, which appeared in
certain Southeast Asian markets in late October and threatened to spread
globally, created "flight-to-quality" demand for fixed-income instruments,
pushing their yields even lower.
We appreciate your confidence in the Value Line Cash Fund and look forward to
serving your investment needs in the future.
Sincerely,
/s/ Jean Bernhard Buttner
Jean Bernhard Buttner
Chairman and President
February 2, 1998
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2
<PAGE>
The Value Line Cash Fund, Inc.
Cash Fund Shareholders
- --------------------------------------------------------------------------------
Economic Observations
It has now been a number of months since the crisis in Asia first made the
headlines in this country, and about that long since the pessimists began to
predict that there would be serious repercussions over here. During that time,
however, there has been little in the economic reports to suggest that this
feared sharp falloff in business activity was taking place on a wide scale.
True, a number of companies are now noting some Asia-related weakness, with
cautionary statements accompanying certain profit reports. In fact, the Asian
problems do raise concerns regarding earnings prospects through the first half
of this year--at least. For the most part, however, economic activity is
sufficiently strong to suggest that corporate earnings will continue to rise,
albeit at a modest pace.
Encouragingly, this long-running business expansion looks as though it will
persist. Overall, the current tenor of the economic data would seem to be
consistent with a growth rate of 2.0%-2.5% for the next several quarters, versus
perhaps 3% had the difficulties in Asia not evolved. We add, however, that even
our reduced expectations assume that the problems in that region will begin to
ease selectively over the next several months, as efforts by the world's leading
banking authorities gradually produce the desired stability.
Meantime, there continues to be limited pressure on the inflation front, with
prices for industrial goods, energy products, and precious metals continuing in
a flat to lower trend. Our sense, for now, is that these favorable pricing
trends will stay intact for the balance of the year. Overall, with the economy
likely to remain on a modest, yet sustainable, growth track, and with inflation
expected to hold at low levels, interest rates should continue to be relatively
stable, thus lending some support to the financial markets during the months
ahead.
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3
<PAGE>
The Value Line Cash Fund, Inc.
Schedule of Investments
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
Amount Maturity (in
(in thousands) Rate+ Date+ thousands)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS (28.9%)
$ 10,000 Federal Home Loan Banks.................................... 5.80% 1/2/98 $ 10,000
5,000 Federal Home Loan Banks.................................... 5.80 9/18/98 5,003
10,000 Federal Home Loan Banks.................................... 5.68 10/16/98 9,997
5,000 Federal Home Loan Banks.................................... 5.90(2) 10/23/98 4,998
5,427 Federal Home Loan Mortgage Corp............................ 6.00(5) 6/1/98 5,414
20,000 Federal National Mortgage Association...................... 5.67(2) 6/24/98 19,997
4,000 Federal National Mortgage Association...................... 5.71 9/9/98 3,999
7,630 Student Loan Marketing Association......................... 5.78(2) 1/21/98 7,630
5,000 Student Loan Marketing Association......................... 5.64(2) 2/19/98 5,000
10,000 Student Loan Marketing Association......................... 5.67(2) 4/21/98 9,999
5,500 Student Loan Marketing Association......................... 6.18(2) 4/16/99 5,524
- ---------- --------
87,557 TOTAL U. S. GOVERNMENT AGENCY OBLIGATIONS ................. 87,561
- ---------- --------
COMMERCIAL PAPER (15.8%)
AUTO & TRUCK (2.3%)
7,000 Ford Motor Credit Corp..................................... 5.51 1/14/98 6,986
- ---------- --------
COMPUTER & PERIPHERALS (2.3%)
7,000 International Business Machine Corp........................ 5.68 1/16/98 6,983
- ---------- --------
DIVERSIFIED COMPANIES (2.3%)
7,000 General Electric Capital Corp.............................. 5.62 1/6/98 6,995
- ---------- --------
ELECTRIC UTILITY-CENTRAL (2.0%)
6,000 Central Louisiana Electric Co.............................. 5.56 1/13/98 5,989
- ---------- --------
ELECTRONICS (2.3%)
7,000 Avnet Inc.................................................. 5.61 1/12/98 6,988
- ---------- --------
INSURANCE-DIVERSIFIED (2.3%)
7,000 American General Financial Corp............................ 5.70 1/16/98 6,983
- ---------- --------
MACHINERY (2.3%)
7,000 Deere (John) Capital Corp.................................. 5.66 1/16/98 6,984
- ---------- --------
48,000 TOTAL COMMERCIAL PAPER..................................... 47,908
- ---------- --------
</TABLE>
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4
<PAGE>
The Value Line Cash Fund, Inc.
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
Amount Maturity (in
(in thousands) Rate+ Date+ thousands)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CORPORATE BONDS & NOTES (12.1%)
AUTO & TRUCK (2.5%)
$ 7,500 Toyota Motor Corp., Euro Notes............................. 5.63% 3/17/98 $ 7,496
- ---------- --------
BANK (4.0%)
7,000 Bank of American National Association...................... 6.10(1) 6/30/98 6,998
5,000 First USA Bank............................................. 6.04(3) 4/16/98 5,002
- ---------- --------
12,000 12,000
- ---------- --------
ELECTRIC UTILITY-EAST (1.6%)
5,000 Gulf Power Co.............................................. 5.00 7/1/98 4,979
- ---------- --------
SECURITIES BROKERAGE (2.3%)
7,000 Merrill Lynch & Co., Inc................................... 5.59(1) 4/6/98 7,000
- ---------- --------
TELECOMMUNICATION SERVICES (1.7%)
5,000 Bellsouth Capital Funding Corp............................. 9.25 1/15/98 5,005
- ---------- --------
36,500 TOTAL CORPORATE BONDS & NOTES ............................. 36,480
- ---------- --------
TAXABLE MUNICIPAL SECURITIES (8.8%)
7,000 Arkansas, Development Financial Authority,
Industrial Facilities Revenue, (Potlatch Corp. Projects)
Ser 1995-B, Letter of credit-Credit Swiss (Weekly Put) . 5.80(2) 8/1/30 7,000
--------
6,300 Carolina Medi-Plan Inc., variable rate
Demand Bonds, Series 1997, Gtd.,
Letter of credit by Wachovia Bank
of North Carolina, N.A. (Weekly Put) ................... 5.71(2) 6/1/22 6,300
--------
7,000 Mississippi Business Financial Corp.,
Industrial Development Revenue Bonds,
Series 1994, (Bryan Foods, Inc.
Project) Gtd.-Sara Lee Corp.
(Weekly Put.) .......................................... 5.80(2) 2/1/19 7,000
6,475 State of Texas, Veterans Housing
--------- Assistance, Refunding Revenue Bonds,
Series 1994 A-2, General Obligation Unlimited
(Weekly Put.) .......................................... 5.90(2) 12/1/33 6,475
--------
26,775 TOTAL TAXABLE MUNICIPAL SECURITIES......................... 26,775
- ---------- --------
</TABLE>
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5
<PAGE>
The Value Line Cash Fund, Inc.
Schedule of Investments
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
Amount Maturity (in
(in thousands) Rate+ Date+ thousands)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSET BACKED SECURITIES (20.3%)
$ 7,000 Advanta Automobile Receivables Trust,
Series 1997-2, Class A-1, Asset Backed
Notes, (Monthly Paydown, Interest and
Principal) ............................................. 5.86% 1/15/99 $ 7,000
4,569 Americredit Automobile Receivable Trust,
Series 1997-C, Class A-1, Asset Backed
Notes, (Monthly Paydown, Interest and
Principal) ............................................. 5.66 9/5/98 4,569
3,923 Arcadia Automobile Receivables Trust,
Series 1997-C, Class A-1, Asset Backed
Notes, (Monthly Paydown, Interest and
Principal) ............................................. 5.65 9/15/98 3,923
6,525 BankAmerica Manufactured Housing Contract
Trust III, Senior/Subordinate Pass-
through Certificates, Series 1997-2,
Class A-1, (Monthly Paydown, Interest
and Principal) ......................................... 5.83 12/10/98 6,525
5,411 Capital Equipment Receivables Trust,
Series 1996-1, Class A-2, Receivable-
Backed Notes (Monthly Paydown, Interest
and Principal) ......................................... 5.95 7/15/98 5,413
7,500 Carco Auto Loan Master Trust, Series
1993-2, Class A-1, Money Market
Extendible Certificates ................................ 5.86(3) 11/15/98 7,500
1,275 Chase Manhattan Auto Owner Trust, Series
1997-B, Class A-1, Money Market Asset
Backed Notes. (Monthly Paydown, Interest
and Principal) ......................................... 5.74 7/10/98 1,275
7,000 Contimortgage Home Equity Loan Trust,
Series 1997-5, Class A-1, Home Equity
Notes (Monthly Paydown, Interest and
Principal) ............................................. 5.91 12/15/98 7,000
7,000 Green Tree Lease Financial LLC, Series
1997-1, Class A-1, Lease-Backed Notes,
(Monthly Paydown, Interest and Principal) .............. 5.91 1/20/99 7,000
</TABLE>
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6
<PAGE>
The Value Line Cash Fund, Inc.
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value (in
Principal thousands
Amount Maturity except per
(in thousands) Rate+ Date+ share amount)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 2,388 Heller Equipment Asset Receivable Trust,
Series 1997-1, Class A-1, Receivable-
Backed Notes, (Monthly Paydown, Interest
and Principal) ......................................... 5.73% 9/25/98 $ 2,388
4,512 Navistar Financial Owner Trust, Series
1997-B, Class A-1, Asset Backed Notes,
(Monthly Paydown, Interest and Pricipal) ............... 5.72 11/15/98 4,512
4,501 PNC Student Loan Trust 1, Series 1997-2
- ---------- Student Loan Asset Backed Notes,
Class A-1 (Monthly Paydown,
Interest and Principal)................................. 5.91 7/20/99 4,501
--------
61,604 TOTAL ASSET BACKED SECURITIES ............................. 61,606
- ---------- --------
260,436 TOTAL INVESTMENTS (85.9%) (Amortized cost $260,330)....... 260,330
- ---------- --------
REPURCHASE AGREEMENTS (13.5%)
(including accrued interest)
41,000 Collateralized by U.S. Treasury Bond,
$32,160,000 13 3/8%, due 8/15/01 value
$41,792,925 (with Morgan Stanley & Co.,
6.20%, dated 12/31/97, due 1/2/98,
delivery value of $41,014,122) ......................... 41,007
EXCESS OF CASH AND OTHER ASSETS
OVER LIABILITIES (0.6%) ................................ 1,757
- ---------- --------
$ 301,436 NET ASSETS (100.0%)........................................ $303,094
========== ========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER OUTSTANDING SHARE ............................ $ 1.00
========
</TABLE>
+ Rate frequency for floating rate notes at December 31, 1997: (1) Daily (2)
Weekly (3) Monthly (4) Quarterly (5) Interest and Principal Paydown Monthly.
+ The rate shown on floating rate securities represents the yield at the end of
the reporting period. The maturity dates on these types of securities reflect
the final maturity dates.
See Notes to Financial Statements
- --------------------------------------------------------------------------------
7
<PAGE>
The Value Line Cash Fund, Inc.
Statement of Assets and Liabilities
at December 31, 1997
- --------------------------------------------------------------------------------
Dollars
(in thousands
except per
share amount)
-------------
Assets:
Investments at value:
(Amortized cost-- $260,330) .............................. $ 260,330
Repurchase agreement ....................................... 41,007
Cash ....................................................... 191
Interest receivable ........................................ 1,878
Receivable for capital shares sold ......................... 687
---------
Total Assets ........................................... 304,093
---------
Liabilities:
Payable for capital shares repurchased ..................... 648
Accrued expenses:
Advisory fee ............................................. 103
Other .................................................... 248
---------
Total Liabilities ...................................... 999
---------
Net Assets ................................................. $ 303,094
---------
Net Assets:
Capital Stock, at $.10 par value
(authorized 2 billion shares,
outstanding 303,164,281 shares) .......................... $ 30,316
Additional paid-in capital ................................. 272,848
Accumulated net realized loss
on investments ........................................... (70)
---------
Net Assets ............................................. $ 303,094
=========
Net Asset Value, Offering and
Redemption Price per
Outstanding Share ........................................ $ 1.00
=========
Statement of Operations
for the Year Ended December 31, 1997
- --------------------------------------------------------------------------------
Dollars
(in thousands)
-------------
Investment Income:
Interest income ........................................... $ 18,019
--------
Expenses:
Advisory fee .............................................. 1,299
Transfer agent ............................................ 284
Postage and other expenses ................................ 79
Auditing and legal ........................................ 51
Printing, checks and stationery ........................... 49
Registration and filing fees .............................. 45
Custodian fees ............................................ 35
Telephone and wire charges ................................ 35
Directors' fees and expenses .............................. 15
Insurance and dues ........................................ 10
--------
Total Expenses before
Custody Credits ..................................... 1,902
--------
Less: custody credits ................................. (10)
--------
Net Expenses .......................................... 1,892
--------
Net Investment Income ..................................... 16,127
--------
Net Realized Gain on Investments .......................... 90
--------
Net Increase in Net Assets
from Operations ......................................... $ 16,217
========
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
8
<PAGE>
The Value Line Cash Fund, Inc.
Statement of Changes in Net Assets
for the Years Ended December 31, 1997 and 1996
- --------------------------------------------------------------------------------
1997 1996
----------------------
(Dollars in thousands)
Operations:
Net investment income .............................. $ 16,127 $ 17,916
Net realized gain on investments ................... 90 55
----------------------
Net Increase in Net Assets from Operations ......... 16,217 17,971
----------------------
Distributions to Shareholders:
Net investment income .............................. (16,127) (18,017)
----------------------
Capital Share Transactions:
Net proceeds from sale of shares ................... 484,462 755,880
Net proceeds from reinvestment of dividends ........ 16,127 18,017
----------------------
500,589 773,897
Cost of shares repurchased ......................... (559,382) (771,397)
----------------------
(Decrease) Increase from capital share transactions (58,793) 2,500
----------------------
Total (Decrease) Increase in Net Assets .............. (58,703) 2,454
Net Assets:
Beginning of year .................................. 361,797 359,343
----------------------
End of year ........................................ $ 303,094 $ 361,797
======================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
9
<PAGE>
The Value Line Cash Fund, Inc.
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
The Value Line Cash Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as an open-end, diversified management
investment company. The Fund's investment objective is to secure as high a level
of current income as is consistent with preservation of capital and liquidity.
The following summary of significant accounting policies is 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, as amended. 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 these objectives.
(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 or 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 and Distributions to Shareholders and
Capital Share Transactions
The Fund earns interest daily on its investments and distributes 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 maintains a $1.00 net asset value per share, the number of
shares sold, shares issued to
- --------------------------------------------------------------------------------
10
<PAGE>
The Value Line Cash Fund, Inc.
- --------------------------------------------------------------------------------
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.
3. Tax Information
At December 31, 1997 the aggregate cost of investments in securities and
repurchase agreement for federal income tax purposes is approximately
$301,337,000. At December 31, 1997, there is no unrealized appreciation or
depreciation of investments.
For federal income-tax purposes, the Fund utilized approximately $90,000 of its
capital loss carryover to offset a realized gain during the year ended December
31, 1997. The Fund had a net capital loss carryover at December 31, 1997 of
approximately $70,000, 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 $1,298,567 was paid or payable to Value Line, Inc. (the
"Adviser"), the Fund's investment adviser, for the year ended December 31, 1997.
This was computed at a 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, 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.
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 36,247,075 shares of the Fund's capital stock,
representing 11.96% of the outstanding shares at December 31, 1997. In addition,
certain officers and directors of the Fund owned 12,468,368 shares of the Fund,
representing 4.11% of the outstanding shares.
- --------------------------------------------------------------------------------
11
<PAGE>
The Value Line Cash Fund, Inc.
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data for a Share of Capital Stock Outstanding Throughout Each Year:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------------------
1997 1996 1995 1994 1993
-----------------------------------------------------------------------------------
<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 ............... .051 .050 .054 .037 .031
Dividends from net investment income (.051) (.050) (.054) (.037) (.031)
-----------------------------------------------------------------------------------
Net realized loss on securities ..... -- -- -- (.005) --
Voluntary capital contribution from
Adviser ........................... -- -- -- .005 --
-----------------------------------------------------------------------------------
Change in net asset value ............. -- -- -- -- --
-----------------------------------------------------------------------------------
Net asset value, end of year ............ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-----------------------------------------------------------------------------------
Total return ............................ 5.10% 5.00% 5.40% 3.69%(1) 3.06%
===================================================================================
Ratios/Supplemental Data:
Net assets, end of year (in thousands) .. $ 303,094 $ 361,797 $ 359,343 $ 341,632 $ 345,769
Ratio of expenses to average net assets . .59% .55% .57% .61% .60%
Ratio of net investment income to
average net assets .................... 4.97% 4.86% 5.27% 3.63% 3.02%
</TABLE>
(1) The total return for 1994 reflects the effect of a voluntary capital
contribution from the Adviser. Without such contribution, the total return would
have been 3.18%.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12
<PAGE>
The Value Line Cash Fund, Inc.
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, 1997, 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, 1997 by correspondence with the custodian, provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
February 13, 1998
- --------------------------------------------------------------------------------
13
<PAGE>
The Value Line Cash Fund, Inc.
Shareholders Meeting Results (unaudited)
- --------------------------------------------------------------------------------
A special meeting of shareholders of The Value Line Cash Fund, Inc. was held on
October 30, 1997. The matters voted upon by the shareholders and the resulting
votes for each matter are presented below.
1. The election of six Directors to serve until their successors are duly
elected and qualified.
<TABLE>
<CAPTION>
Directors For Withheld Broker Non-Voters*
-------- ---- ----------- -----------------
<S> <C> <C> <C>
Jean Bernhard Buttner 150,648,010 3,104,900 0
John W. Chandler 150,419,583 3,333,327 0
Leo R. Futia 150,336,000 3,416,910 0
David H. Porter 150,196,014 3,556,897 0
Paul Craig Roberts 150,547,908 3,205,002 0
Nancy-Beth Sheerr 150,407,748 3,345,163 0
</TABLE>
2. Ratification of the selection of Price Waterhouse LLP as independent
accountants for the fiscal year ending December 31, 1997.
<TABLE>
<CAPTION>
For Against Abstain Broker Non-Voters*
---- ---------------- ------- -----------------
<S> <C> <C> <C>
149,814,921 997,668 2,940,322 0
</TABLE>
* Broker non-votes are proxies received by the Fund from brokers or nominees
when the broker or nominee neither has received instructions from the beneficial
owner or other persons entitled to vote nor has discretionary power to vote on a
particular matter.
- --------------------------------------------------------------------------------
14
<PAGE>
The Value Line Cash Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
15
<PAGE>
The Value Line Cash Fund, Inc.
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 to
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 corporate 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
individual 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.
1993--ValueLine 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 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.
<PAGE>
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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 Co.
225 Franklin Street
Boston, MA 02110
SHAREHOLDER State Street Bank and Trust Co.
SERVICING AGENT c/o NFDS
P.O. Box 419729
Kansas City, MO 64141-6729
INDEPENDENT Price Waterhouse LLP
ACCOUNTANTS 1177 Avenue of the Americas
New York, NY 10036-2798
LEGAL COUNSEL Peter D. Lowenstein, Esq.
Two Greenwich Plaza, Suite 100
Greenwich, CT 06830
DIRECTORS Jean Bernhard Buttner
John W. Chandler
Leo R. Futia
David H. Porter
Paul Craig Roberts
Nancy-Beth Sheerr
OFFICERS Jean Bernhard Buttner
Chairman and President
Nathan Grant
Vice President
Charles Heebner
Vice President
David T. Henigson
Vice President
Secretary/Treasurer
Jack M. Houston
Assistant Secretary/Treasurer
Stephen La Rosa
Assistant 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 audited report is issued for 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).
VLF706138
