Synchronisation of cash flows is an important cash management technique and effective synchronisation can actually increase a firm's profitability.

Question

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Synchronisation of cash flows helps a firm to manage its cash effectively and optimise its liquidity position. This, in turn, can contribute to increased profitability as the firm can avoid unnecessary costs of borrowing, manage its working capital effectively and utilise its surplus cash efficiently. Therefore, effective synchronisation of cash flows is an important cash management technique that can enhance a firm's profitability.

Synchronisation of Cash Flows Is an Important Cash Management Technique