Explore BrainMass

Explore BrainMass

    Cash management and credit management techniques

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    I need with the following questions:

    How do you evaluate the cost and benefits of cash management techniques to maximize organizational value. What is the cost of float to an organization?

    How do you apply the cost of trade credit techniques to assess the cost of trade credit for an organization. What do discounts really cost an organization?

    © BrainMass Inc. brainmass.com June 3, 2020, 9:24 pm ad1c9bdddf
    https://brainmass.com/business/cash-management/cash-management-and-credit-management-techniques-180333

    Solution Preview

    I need with the following questions:

    How do you evaluate the cost and benefits of cash management techniques to maximize organizational value. What is the cost of float to an organization?

    A firm should hold an optimum balance of cash, and invest any temporary excess amount in short-term (marketable) securities. In choosing these securities, the firm must keep in mind safety, maturity and marketability of its investment.
    Steps of Cash Management
    Cash planning
    Managing the cash flows
    Optimum cash level
    Investing surplus cash

    Thus strategic benefits of cash management techniques are:
    ? Efficient managing cash flows into and out of the firm
    ? Efficient managing cash flows within the firm,
    ? Financing deficit or investing surplus cash and thus, controlling cash balance at a point of time. It is an important function in practice because it is difficult to predict cash flows and there is hardly any synchronization between inflows and outflows.

    Managing float

    Float is the delay between the time when a cheque is issued by a company and the time when it is ...

    Solution Summary

    This explains the cost and benefits of cash management and credit management techniques

    $2.19

    ADVERTISEMENT