CHAPTER 17
Cash Management
LEARNING OBJECTIVES
- Explain the reasons for holding cash.
- Underline the need for cash management.
- Discuss the techniques of preparing cash budget.
- Focus on the management of cash collection and disbursement.
- Emphasize the need for investing surplus cash in marketable securities.
INTRODUCTION
Cash is an important current asset for the operations of the business. It is the basic input needed to keep the business running on a continuous basis; it is also the ultimate output expected to be realized by selling the service or product manufactured by the firm. The firm should keep sufficient cash, neither more nor less. Cash shortage will disrupt the firm’s manufacturing operations while excessive cash will simply ...
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