Question

Discuss this statement: “Efficient cash management will aim at maximizing the availability of cash inflows by decentralizing collections and decelerating cash outflows by centralizing disbursements.”

Answer 1

Answer:

Hi buddy

Explanation:

Efficient cash management will aim at maximizing the availability of cash inflows by decentralizing collections and decelerating cash outflows by centralizing disbursements.”Cash is the most important current asset for a business operation. It is the thing that carry out the business operations. So a business should have a nice amount saved with them all the time. Cash can be o two forms, generally cash means currency and other things like cheaques drafts etc  And the second type is the assets that can be converted into cash.  Cash in its own form is an idle asset.Unless employed in some form or another, it does not earn any revenue. so  Excessive cash will not contribute to the firm ‘s profits and storage of cash will disrupt its manufacturing operations.

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Answer 2

Answer:

Cash management is concerned with:

• Managing cash flow into and out of the company.
• Managing cash within the company.
• Managing cash balances deficit financing or investing surplus cash.

Cash management aims to complete the different duties of cash collection, payment of outstanding's, and deficit funding or surplus investment at the lowest possible cost.

Explanation:

Efficient cash management:

By decentralising collections and centralising disbursements, efficient cash management aims to maximise cash inflows while decelerating cash outflows. For a business, cash is the most crucial current asset. It's the thing that keeps the firm running. As a result, a company should always keep a substantial quantity of cash on hand. Cash can take two forms: one is currency and other items such as checks and draughts, and the other is assets that can be converted into cash. Cash is a dormant asset in its own right. It does not generate any revenue unless it is used in some way.

It is extremely difficult to precisely estimate financial flows. In general, there is no association between inflows and outflows, save for monetary inflows at periods.

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