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

Question

Quizplus · Accepted Answer

Sound cash management techniques focus on minimizing collection float (the time between when a payment is made and when it is received) and maximizing disbursement float (the time between when a payment is due and when it is actually paid). This helps to minimize the cash conversion cycle (the time between when cash is paid out and ultimately collected), which in turn improves the company's financial health and liquidity. Therefore, the best choice is A as it includes minimizing collection float, maximizing disbursement float, and minimizing the cash conversion cycle.

Sound Cash Management Techniques Would Support ________