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cash management practice. The third chapter, contain methodology of the study. Thefourth chapter contains data analysis and interpretation. Finally, the last chapter willprovide summary, conclusion, and recommendation.CHAPTER TWO2. Literature Review2.1 Cash ManagementDefinition of cash: - cash is a medium of exchange that a bank will accept that a bankwill accept for deposit and immediate credit to the depositor account. Cash is anymedium of exchange that a bank will accept of face value which includes bank deposits,currency, coins, bank draft and money order.Definition of management: - is a process of setting organizing and achieving of a givenmanagement basic functions which as planning, organizing, controlling and directing thatutilize human, financial and material resources. Management is a process by whichunder taken by one or more persons to achieve the stated goals (Planket,1986).Definition of Cash management! - Strategy by which accompany administer and investits idle cash. Cash management is concerned with the managing of cash balance held bythe bank for liquidity purpose and investing idle cash. Cash management is managing the6
cash properly to maintain the profitability of cash excess and to minimize the cashshortage risk. Cash management is generally cantered on forecasting and internalcontrol. Cash management is importance for any business enterprise because cash ameans of acquiring goods and services. The management of a cash is necessary sincecash constitute the smallest portion of asset but it needs considerable time devotion formanaging due to is nature of easily misappropriates in order to solve uncertainty aboutcash inflow and out flow and also lack of balance between cash receipt And disbursement, the firm should develop appropriate strategies for cash management.Some of the cash management strategies are the following:-Cash planning: - Cash inflow and out flow should be planning to protect cash surplus ordeficit for each period of the planning period. Cash beget should be prepared for thispurpose.Management the cash flow: - the flow cash should be properly managed the cash out flowshould be decelerated and in flow relatively increase. Optimum cash level: - The firm should be deciding about the appropriate level of cashbalances. The excess cash and cash deficit should be matched to determine the optimumlevel of cash balances.Investing surplus Cash:-The surplus cash balances should be properly invested to earnprofits. The firm (bank) should decide about the division of cash balance betweenalternative short term investments such as bank deposits market securities. The idle cashmanagement should be depend on the firm product, competition etc.Cash is the most liquid asset and the standard medium of exchange and the basic formeasuring and accounting for all other items. Cash is important current asset foroperation of a business. It is the basic impute needed to keep the business running oncontinuous basic. It also the ultimate output expected to be realized after services isdelivered.