• +1 (317) 799-6577
  • support@sharksavewriters.com
Hire Writer

MANAGEMENT OF CASH FLOW

 

 

 

 

 

 

 

MANAGEMENT OF CASH FLOW

STUDENTS NAME:

INSTITUTIONAL AFFILIATION:

  1. Consider cash collection items. How can a firm minimize this time, and what are some of the costs? Do we worry about this as individuals as well? If so, how?

Cash collection is the time when a client makes payment when cash is available. The collection time is compost of three items.

  1. Delivery time: this is the time taken to from the payment time up to the delivery time of the payment.
  2. Processing delay: this is the time taken to process and deposit payment when received.
  3. Clearing delay: this is the time taken by the payment to be withdrawable after being deposited.

The processing time can be avoided by acquiring the clients to pay at the time of sale. Reducing processing time may abolish delivery delay, and therefore processing delay is reduced. Using electronic fund transfer minimizes most of the delay in cash collection. Electronic fund transfer eliminates the delivery time, shortens processing delay, and doesn’t delay the payment available for withdrawal.

This cash collection also affects individuals. We face time clearing delay to the time available for money available for withdrawal. For example, when a cheque is deposited, it may take up to three working days.

  1. How can capital structure decisions affect the control of a firm? In other words, would the control issues impact your decisions on how to raise money for your company?

Capital in a firm is the backbone of all the operations. Management control is a significant determinant in determining the capital structure decision. The stakeholders are considered the principal shareholders and can participate in decision-making through the elected board of directors. The firm’s policies are taken to the shareholders, and the board of directors supervises the daily workflow. When the equity shareholders don’t wish to interfere with control, the company leans on debt funds. Any strange matter of the shares will affect the power of the existing stakeholders.

  1. How can sales be used to develop pro forma financial statements?

A Pro forma financial statement is a financial statement issued by an entity using hypothetical conditions about fore coming events. Since the main agenda of a business is to make sales and earn profits. Since a pro forma invoice predicts the forefront of coming events,  sales can determine the business’s future progress. Sales can be used to predict future increases or decrease in sales. For instance, if a company sales increase due to a certain promotion and the promotion may occur the in future, they expect the sales to rise.

 

 

Reference

Golovchenko, A. V., & Dmitriev, N. D. (2019). Management of cash flow of the enterprise. Modern Science, (5-4), 47-49.

https://www.youtube.com/watch?v=9GmekZcOwxQ)

 

error: Content is protected !!