Essay
You Make the Call-Situation 1
A small firm specializing in the sale and installation of swimming pools was profitable but devoted very little attention to management of its working capital. It had, for example, never prepared or used a cash budget. To be sure that money was available for payments as needed, the firm kept a minimum of $25,000 in a checking account. At times, this account grew larger; it totaled $43,000 at one time. The owner felt that this approach to cash management worked well for a small company because it eliminated all of the paperwork associated with cash budgeting. Moreover, it had enabled the firm to pay its bills in a timely manner.
Correct Answer:
Verified
Correct Answer:
Verified
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