Sound cash management techniques would support
A) maximizing collection float, minimizing disbursement float, and minimizing operating cash.
B) minimizing collection float, maximizing disbursement float, and maximizing operating cash.
C) minimizing collection float, maximizing disbursement float, and minimizing the cash turnover.
D) minimizing collection float, maximizing disbursement float, and minimizing the cash conversion cycle.

Question

Quizplus · Accepted Answer

The cash conversion cycle measures the time it takes for a company to convert its investment in inventory and other resources into cash flow from sales. Minimizing the cash conversion cycle is one of the key goals of sound cash management techniques. This involves minimizing collection float (the time between when a customer makes a payment and when the funds are available to use), maximizing disbursement float (the time between when a payment is made and when the funds are actually deducted from the account), and maximizing operating cash (the amount of cash a business has available for day-to-day operations). Therefore, the best choice is D.

Sound Cash Management Techniques Would Support