Ways to Optimize Cash Flows
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What are some ways in which a company can speed up the inflow of cash and slow the outflow of cash? Cite specific examples of techniques that can be used.
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Solution Summary
The problem outlines ways to slow cash outflows and speed cash inflows.
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There are several techniques that a company can use to speed up cash inflows while slowing cash outflows. First, a company can reduce prices. The effect of lowering prices is to increase the volume of sales, which increases cash inflows. Typically the company will lower prices on slower moving items, which will slow demand for other items while increasing demand for the sale items. This slows cash outflows (because the company focuses on selling items already in inventory while not having to replenish higher demand ...
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