What type of cash balance is this

Reference no: EM133662520

Question: The importance of managing cash in hand Cash is considered an idle asset because it does not earn interest. Good financial management requires a firm to hold a limited amount of cash, but it is important for the firm to hold sufficient cash so that it can pay its current obligations, maintain its credit rating, and meet its unexpected cash needs. The following statement refers to a type of cash balance. Select the best type of cash balance to complete the sentence: A cash balance is held to take care of the firm's day-to-day operations, such as paying wages and purchasing supplies. Consider the following case of Miami Fabricators Inc.: Imagine that Miami Fabricators Inc. is a manufacturing company. Miami's chief financial officer is concerned about the risk of fluctuations in the latest cash forecast that was prepared for Miami. To mitigate the risk, the CFO has increased the cash balance on hand as a type of safety net if the forecast is not met. What type of cash balance is this?

Reference no: EM133662520

Questions Cloud

Analyze a sequential game strategic role of capacity : Simultaneously the facility to construct and then, given the capacities, they decide secretly and simultaneously the output to produce.

Identify two risks of using debt financing : Identify two risks of using debt financing for a small business. Identify one benefit of using debt financing for a small business

Discuss health promotion strategies and program ideas : Identify three statistics and/or findings, and Discuss health promotion strategies and program ideas to address the disparities.

How utilization of telehealth balance enhanced healthcare : How does the utilization of telehealth balance enhanced healthcare access against the financial costs or savings for healthcare providers?

What type of cash balance is this : To mitigate the risk, the CFO has increased the cash balance on hand as a type of safety net if the forecast is not met. What type of cash balance is this

Calculate how much cash was paid for taxes : Ending income taxes payable balance of $26,200, Wages payable decreased $10,600. Rent payable increased by $1,000. Calculate how much cash was paid for taxes

What is the efficiency of the screening operation : remove the -19.0 mm material and the undersize from the screen is 50 TPH, what is the efficiency of the screening operation

Where you find information and what medication is prescribed : From the plan, are you able to ascertain what medications are required for TJ? Where do you find this information and what medication is prescribed?

What was poeltl stock-based compensation expense : Poeltl's average stock price during the year was $79.00. What was Poeltl' stock-based compensation expense for the current year

User Account

All Pages