Cash management is a very important function of managers.
Companies need to manage their operations in a way that they can
sustain growth and yet not run out of cash.
Consider the case of the Extensive Enterprise’s Corporation:
Extensive Enterprise’s Corporation has forecasted sales of
$30,000,000 for next year and expects its cost of goods sold (COGS)
to remain at 80% of sales. Currently, the firm holds $3,200,000 in
inventories, $1,900,000 in accounts receivable, and $2,600,000 in
accounts payable.
Approximately...