Purchase Solution

Fluctuations in Cash Balances

Not what you're looking for?

Ask Custom Question

What can be done to help smooth out major fluctuations in a firm's cash balances?

Purchase this Solution
Solution Summary

The solution explains how to mitigate cash balance fluctuations.

Solution Preview

For this the cash budget must be prepared. Cash budget will help in planning of inflows and outflows, which will help in smoothening the fluctuations. Properly preparing the cash budget will show how cash flows in and out of your business. Also, it may then be used in planning your short-term credit needs. In today's financial world, you are required by most financial institutions to prepare cash budgets before making capital expenditures for new assets as well as for expenditures associated with any ...

Purchase this Solution
Free BrainMass Quizzes
Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

View More Free Quizzes
Related BrainMass Solutions

  • Master Budget with Supporting Schedules

    Consequently, the cash budget should be broken down into time periods that are short enough to capture major fluctuations in cash balances. Your tutorial is attached. Click in cells to see computations.

  • companies use foreign exchange

    Foreign exchange There are several ways in which businesses use foreign exchange. Foreign exchange balances are used to make imports.

  • Multiple Choice

    (D) The target cash balance is set optimally such that it need not be adjusted for seasonal patterns and unanticipated fluctuations in receipts, although it is changed to reflect long-term changes in the firm's operations.

  • International Business and Local Business

    The magnitude of impact is dependent on the amount that the business has borrowed and terms of the same, on the cash balances and finally on whether the business operates in markets that depend on consumer spending.

  • Finance

    C A good cash budgeting system will improve the ability of a firm to forecast its cash requirements, and this will enable it to carry larger cash balances.

  • Trial Balance

    In order to make a new trial balance, we will see the effect of each of these transactions on the given balances May 3 Paid one-half of 4/30/06 accounts payable. This would reduce cash and accounts payable by 3,000.

  • Statement of cash flows

    The increase was caused by the cash purchase of equipment. 6. The beginning and ending balances in the notes payable account were $50,000 and $150,000, respectively. The increase was caused by additional cash borrowing. 7.

  • Apollo Shoes Casebook

    In case of Apollo Shoes Company because of the sudden decline in inventory he must examine the fluctuations in sale, purchases, and returns. The auditor should test out the summarization process.

  • Hedging for Exchange Rates, Fair Value, Cash Flow, Currency

    This solution of 213 words discusses hedging in terms of protection against exchange rate fluctuations, fair value hedges, cash flow hedges and foreign currency hedges.

View More Related Solutions