AN ANALYSIS OF CASH MANAGEMENT OF FOOD LTD
ABSTARCT :
Cash management is a critical aspect of financial management in any business organization, and it plays an especially vital role in industries such as food processing, where operating cycles are often short and cash flows can be unpredictable. Effective cash management ensures that a company maintains adequate liquidity to meet its short-term obligations while also making optimal use of surplus funds. In this context, the present study focuses on Food Ltd, a company operating in the fast-paced and highly competitive food industry, where efficient handling of cash can significantly impact operational stability and profitability.
The food industry is characterized by rapid inventory turnover, perishable goods, and fluctuating demand patterns, all of which necessitate a strong and responsive cash management system. Companies in this sector often face challenges such as seasonal fluctuations, supply chain delays, and volatile input costs, making it crucial to manage cash inflows and outflows efficiently. For Food Ltd, cash management is not merely about having enough liquidity—it is about strategically balancing incoming and outgoing cash to ensure uninterrupted operations and the ability to seize new opportunities.
Cash, being the most liquid asset, is the lifeblood of a business. A shortage of cash, even when a firm is profitable, can result in missed payments, delayed operations, or loss of creditworthiness. On the other hand, excess idle cash reflects poor utilization of resources, which could otherwise be invested to earn returns. This study attempts to analyze how Food Ltd manages its cash position, what tools and techniques are used, and how efficient those methods are in optimizing liquidity without compromising profitability.
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