Understanding Cash and Cash Management

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What is the primary role of cash in a company, based on the text?

To finance the company's activities

What does 'Cash is king' imply?

Cash is the most valuable asset in the company

Who is ultimately responsible for managing cash within a company?

Finance director

In the context of cash management, what is the main consequence of poor credit control?

Cash shortage

How can a business prevent a cash shortage, as suggested in the text?

Utilizing cash flow forecasting

What does a positive cash flow indicate about a business, based on the text?

Financial stability

What is the main focus when trying to improve net cash flow?

Reducing expenses

How does cash flow relate to the product life cycle according to the text?

New products replace declining ones to maintain cash flow

Why is cash flow forecasting considered important for businesses?

To identify potential cash shortages and business problems

What is working capital mainly used for in a business?

Covering day-to-day operational expenses

Which of the following is NOT a factor that influences the accuracy of cash flow forecasting?

Advanced forecasting tools

In the context of the text, what best describes profit?

Net income after all expenses are deducted

Test your knowledge on cash and cash management, including concepts such as current assets, cash flow, and the importance of cash for financing activities. Learn about who is typically in charge of managing cash in a company.

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