Cash Management
RUNNING HEAD: CASH MANAGEMENT
Cash Management
Introduction
Most companies do not want to keep any more cash on hand than what is absolutely necessary. Most companies must keep some cash for transactions, bank payments, and potential emergencies. The opportunity cost of holding an excess of cash rather than reinvesting it into current assets or growing the firm's fixed assets is often significant. There are multiple techniques that a firm can employ to manage its cash. Some of these techniques include float, short-term investments, and international cash management. These techniques are discussed in the following sections.
Due to the opportunity cost of holding excess cash, most companies try to leverage the minimal amount of cash that they carry to cover as many payables as possible. One way that firms achieve this goal is by employing the use of float. Float refers to the difference between the balance carried on the corporate books and the amount credited to the......
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Approximate Word Count: 1281
Approximate Pages: 6 (250 words per double-spaced page)
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