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Impact of current assets & liability on cash management

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I need to understand how to: Explain how current asset and liability accounts affect cash managment

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Explain how current asset and liability accounts affect cash management

Cash management is the management of cash to maintain the company financially healthy which means the management of cash aims to maintain the short term solvency and the long term survival of the organization. To manage the cash, current assets, current liabilities and other liabilities need to be managed efficiently.

Current assets mean those assets which can be easily converted into cash. Current asset consists of cash, accounts receivable, inventory and marketable securities. If the current assets are less, then the company's liquidity position will ...

Solution Summary

The answer describes the meaning of current assets and current liabilities and also its impact on cash management.