A company that is effectively managing its cash will have which of the following conditions?
A company that is effectively managing its cash will have which of the following conditions?
A company that is effectively managing its cash will aim to have low accounts receivable, meaning they are collecting payments from customers quickly. Low inventory indicates that the company is not tying up too much cash in stock and is managing inventory efficiently. High accounts payable suggests that the company is taking full advantage of credit terms offered by suppliers, retaining the cash within the business for a longer period. This scenario contributes to better cash flow management.
why not B
Yes, it should be B. Because if the company receives less and pays more cannot be effectively managing the finances
Answer is A: My opinion because company has more working capital ( Cash On Hand ) Low accounts receivable Company has more cash On hand low inventory Company has more cash On Hand that not hold up in Inventory high accounts payable