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Cash management is about managing excess cash also. The response of management must depend on whether the surplus is large and how long it is likely to exist. If the balance is large as well as is likely to remain then management have a duty to look for appropriate investment opportunities or else refund the investors with a special dividend for example. Smaller cash balances is able to be actively managed via short term deposits.
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Current Assets:- Stock of Raw-Materials :- [(Cost of yearly consumption Of raw material)*{ (Average Inventory holding period (weeks/months))}/(52 weeks / 12 months)]=
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The capability of an asset to be converted into cash as quickly as possible without any discount to its value.
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