Business Administration - Accounting & Financial Planning FIN401 Chapter Notes - Chapter 4: Cash Flow, Financial Institution, Accounts Receivable
20 Jan 2018
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Other uses: the cash budget: implemented to produce a more favourable cash result. Allows management to change plans before they are. Allows management to choose the most correct investment. Allows management to arrange the most appropriate option in the case of forecast surpluses financing solution in the case of forecast deficits. Knowing the timing, magnitude and duration of cash surpluses allows management to choose the most appropriate management response: small amount of surplus available for a short period of time (ie. less than ,000) Keep in current account: small sum available for a long period time. Potentially retire debt: large sum available for a short period of time 30 90 days (ie. greater than ,00) Invest in money market securities such as t-bills: large sum available for a long period time. Consider dispersing excess funds as cash dividends. Alternatively invest in longer-time, higher yielding investments.
