Question

175 words

discuss a management strategy used to retain or increase cash. How are the applications of these strategies similar or different for business and individuals?

Answer 1

Management strategy used to retain or increase cash are as follows:-

1. Lower/ Nil Dividend Payout:- No dividend or lower dividend will help to increase  cash

2. No Capital expenditure: Scrapping Capex proposals will prevent cash out flow. Instead of buying it may go for leasing.

3. Increase in average credit period and aggressive collection from the customers

4. Inventory management so that the cash flows for the maintenance of appropriate inventory may be saved.

5. Cutting out avoidable expenses and revaluating the operating expenses may help to save the cash for an organisation

Part -II

Application of these strategies will vary for individual and business because an individual can do lot more than the businesses to avoid its expenses, however for a business to survive there are certain expenses which cannot be scrapped. Also since business has a large scale of volume for operations as compared to the affairs of an individual it sometimes becomes hard to avoid any expenditure.