A small firm's minimum cash balance should be two times its average weekly sales.

Question

Quizplus · Accepted Answer

There is no universal rule for determining a small firm's minimum cash balance. It varies depending on the industry, the company's size, expenses, and other factors. A firm's cash balance may also fluctuate based on its cash flow management strategy. Therefore, it is incorrect to assume that a small firm's minimum cash balance should be two times its average weekly sales. It is recommended that a firm develops a cash reserve strategy that aligns with its unique financial circumstances, goals, and risks.

A Small Firm's Minimum Cash Balance Should Be Two Times