How is Cash Managed Essay

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FINANCE Finance: Cash ManagingCash management is critical to the success of any business, particularly working capital management. Working capital includes all the required ingredients for managing the entire cash of the company, such as cash flow, current assets, liabilities, and cash ratio analysis (Tuovila, 2022). Maximization of profits would only be possible if effective production, stock, and operation management is done in alignment with the cash available at hand.Efficacious inventory management is one of the critical factors in managing cash so that a high net working capital could be attained. Slow-moving inventory is the most undesirable thing for companies despite being an asset, it might become an overload for handling and adding to the costs of the firm. Hence, longer inventory turnover periods are one of the ways companies manage their cash effectively (Aldubhani et al., 2022).Furthermore, Miller-Orr model is another useful tool for managing cash conveniently since liquidity and profitability could be scrutinized deeply for assessing the optimal value of the company (Morshed, 2020).

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Moreover, managing the cash conversion cycle is a useful strategy that companies use for managing cash. The conversion cycle determines less debt required by the firm and stronger equity financing, therefore, higher returns (Ebben &…

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…cards promotes marketing endeavors of the company that would give rise to maximized sales and profits, resulting in improved cash flow, inventory management, and strong firm value (Kile Jr., 2007). Gifts should not be considered as a liability, rather an asset-making tool for upgraded cash flow management abilities......

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