Optimal Cash Management Strategy

Very Hard Working Capital Management Cash Management

ABC Corporation is in the process of reviewing its cash management practices. The company has been facing issues with maintaining sufficient cash balances for daily operations while also trying to maximize investment returns on surplus cash. The CFO is considering implementing a cash management strategy that involves managing cash conversion cycles, maintaining optimal cash reserves, and investing excess cash wisely.

Which of the following strategies would BEST help ABC Corporation optimize its cash management and improve its overall liquidity position?

Increase the frequency of cash flow audits to ensure greater forecasting accuracy.

Invest excess cash into long-term financial instruments to maximize returns.

Set a targeted cash reserve that aligns with the cash conversion cycle and operating requirements.

Hint

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% Correct77%