Cash Management
The working capital of an organization changes on a continuous basis and should be carefully monitored by finance managers to determine the correct course of action to take. “The financial executive probably devotes more time to working capital management than to any other activity.” (Block & Hirt, 2005, p. 145) The goal of financial executives in managing working capital is to keep costs to a minimum. This goal is accomplished through understanding the nature of asset growth, the process of matching sales and production, and financial aspects of working capital management.
Nature of Asset Growth
While most companies would like for all of their current assets to be self-liquidating and have zero debt, the very nature of business is to grow and obtain assets. For example, John starts a home t-shirt business printing t-shirts from home and sells them at the local beach to tourists. Each day he sells all his t-shirts leaving him with no inventory and a handful of cash. John takes......
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Approximate Word Count: 1187
Approximate Pages: 5 (250 words per double-spaced page)
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