1. MAN 470 – Berk TUNCALI 1

2. What is Cash Management? It is the process of forecasting, collecting, disbursing, investing and planning for the cash a company needs to operate smoothly. Ford motor company almost went bankrupt after a month of opening due to a cash crises before becoming on of the largest companies in the world. 2

3. Cash Flow: a method of tracking a company’s liquidity and its ability to pay its bills and other financial obligations on time by tracking the flow of cash into and out of the business over a period of time. Cash Flow Cycle: Time lag between paying suppliers for merchandise or materials and receiving payment from customers. 3

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5. Preparing a Cash Budget Cash Budget: is a map showing the amount and timing of cash receipts and cash disbursements on daily, weekly and monthly basis. It requires 5 steps to create; 1. Determining an adequate minimum cash balance 2. Forecasting sales 3. Forecasting cash receipts 4. Forecasting cash disbursements 5. Estimating the end of the month cash balance 5

6. Cash Budget is usually prepared in 3 separate scenarios: 1. Pessimistic 2. Most Likely 3. Optimistic Cash Budget Diagram on Page 302 6

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8. THANK YOU 8