Cite.Co is a repository of information and resources created by industry seniors and experts sharing their real world insights. Join Network
which type of factors affecting to cash balances. please reply with detail answer
From India , Ahmadabad
Hi

Here is u r answer

Factors of Cash Management

Cash management is concerned with the managing of:

Cash flows into and out of the firm,

Cash flows within the firms,

Cash balance held by the organization at a point of time by financing deficit or investing surplus cash. It can be represented by a cash management cycle (please see the table below). Sales generate cash which has to be disbursed out. The surplus cash has to be invested while deficit has to be borrowed. Cash management seeks to accomplish this cycle at a minimum cost. At the same time, it also seeks to achieve liquidity and control. Cash management assumes more importance than other current assets because cash is the most significant and least productive asset than a firm holds. It is significant because it is used to pay the firmís obligation. However, cash is unproductive. Unlike fixed assets or inventories, it dose not produce goods for sale. Therefore, the aim of cash management is to maintain adequate control over cash position to keep the firm sufficiently liquid and to use excess cash in some profitable way.



Business operation

Cash Collection









Deficit

Borrow







Surplus Invest





Information & control





Cash Payment









Cash Management Cycle


Excellent description of cash management by Sanju!!
I would like to add that "Cash Planning" is equally important in managment of cash. Firms need to relegiously follow cash forecasting and prepare preiodical cash flow reports.

From Saudi Arabia , Riyadh
This discussion thread is closed. If you want to continue this discussion or have a follow up question, please post it on the network.
Add the url of this thread if you want to cite this discussion.






About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service



All rights reserved @ 2020 Cite.Coô