The third chapter contain methodology of the study The fourth chapter contains

The third chapter contain methodology of the study

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cash management practice. The third chapter, contain methodology of the study. The fourth chapter contains data analysis and interpretation. Finally, the last chapter will provide summary, conclusion, and recommendation. CHAPTER TWO 2. Literature Review 2.1 Cash Management Definition of cash: - cash is a medium of exchange that a bank will accept that a bank will accept for deposit and immediate credit to the depositor account. Cash is any medium 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 given management basic functions which as planning, organizing, controlling and directing that utilize human, financial and material resources. Management is a process by which under taken by one or more persons to achieve the stated goals (Planket,1986). Definition of Cash management! - Strategy by which accompany administer and invest its idle cash. Cash management is concerned with the managing of cash balance held by the bank for liquidity purpose and investing idle cash. Cash management is managing the 6
cash properly to maintain the profitability of cash excess and to minimize the cash shortage risk. Cash management is generally cantered on forecasting and internal control. Cash management is importance for any business enterprise because cash a means of acquiring goods and services. The management of a cash is necessary since cash constitute the smallest portion of asset but it needs considerable time devotion for managing due to is nature of easily misappropriates in order to solve uncertainty about cash 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 or deficit for each period of the planning period. Cash beget should be prepared for this purpose. Management the cash flow: - the flow cash should be properly managed the cash out flow should be decelerated and in flow relatively increase. Optimum cash level: - The firm should be deciding about the appropriate level of cash balances. The excess cash and cash deficit should be matched to determine the optimum level of cash balances. Investing surplus Cash:-The surplus cash balances should be properly invested to earn profits. The firm (bank) should decide about the division of cash balance between alternative short term investments such as bank deposits market securities. The idle cash management should be depend on the firm product, competition etc. Cash is the most liquid asset and the standard medium of exchange and the basic for measuring and accounting for all other items. Cash is important current asset for operation of a business. It is the basic impute needed to keep the business running on continuous basic. It also the ultimate output expected to be realized after services is delivered.

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