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Managing and Monitoring Cash

Managing and Monitoring Cash - Managing and Monitoring Cash...

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Managing and Monitoring Cash Many companies struggle, not because they fail to generate sales, but because they can't manage their cash. A real-life example of this is a clothing manufacturing company owned by Sharon McCollick. McCollick gave up a stable, high-paying marketing job with Intel Corporation to start her own company. Soon she had more orders from stores such as JC Penney and Dayton Hudson (now Target) than she could fill. Yet she found herself on the brink of financial disaster, owing three mortgage payments on her house and $2,000 to the IRS. Her company could generate sales, but it was not collecting cash fast enough to support its operations. The bottom line is that a business must have cash. 6 A merchandising company's operating cycle is generally shorter than that of a manufacturing company . Illustration 7-12 shows the cash to cash operating cycle of a merchandising operation. 7-12 Operating cycle of a merchandising company
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