Question

in managing working capital the finance manager face's the problem of compromising the conflicting goals of liquidity and profitability-comment. What strategy should the finance manager develop to solve this problem​

Answer 1

Answer:

Liquidity and profitability

Explanation:

Liquidity management helps small businesses assess their financial performance. Simply put, it helps you determine the amount of cash you have available to make routine payments and meet your obligations, in order to keep your business afloat. For instance, liquidity management helps you calculate your working capital.

Profitability is the ability of a business to earn a profit. A profit is what is left of the revenue a business generates after it pays all expenses directly related to the generation of the revenue, such as producing a product, and other expenses related to the conduct of the business activities.

Here are the a few most essential

principles of robust liquidity risk management that you should consider and implement at your middle-market bank:

1)Identify Liquidity Risks Early.

2)Monitor & Control Liquidity 3)Regularly.

4)Conduct Scheduled Stress Tests.

5)Create A Contingency Plan.

6)Early Invoice Submission: Submit your invoices as quickly as possible to your customers.

7)Switch from Short-term debt to Long-term debt: Use long-term debt to finance your business instead of short-term debt.

8)Get Rid of Useless Assets

9)Control Your Overhead Expenses

10)Negotiate for Longer Payment Cycles

Answer 2

Answer:

in managing working capital the finance manager face's the problem of compromising the conflicting goals of liquidity and profitability-comment. What strategy should the finance manager develop to solve this problem