9
Management of Cash and Near-Cash Assets
OBJECTIVES
To describe the motives behind holding of cash in a firm To ascertain the cash requirements of a firm during a particular period
To discuss how the cash need is optimised through accelerating cash inflows and controlling disbursements
To determine the optimal ratio between cash and near-cash assets
To discuss cash management in international firms whose operations are spread out over a number of countries
Cash is the most liquid form of current assets. It is crucial if the firm is to operate on a continuous basis. This is why a firm’s cash balance, that is, cash in hand and demand deposits with the bank, must not be so low as to cause an interruption in its operations, and, thereby, retard ...
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