Cash planning involves the preparation of a firm's cash budget. Without adequate cash-regardless of the level of profits-any firm could fail.

Question

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Cash planning is important for any business as cash flow is vital for the survival of the business. Profitable businesses can also fail due to a lack of cash. Therefore, preparing a cash budget and ensuring adequate cash reserves is crucial for the success of any business.

Cash Planning Involves the Preparation of a Firm's Cash Budget