Working Capital and Cash Flow

Joseph E. Finnerty (finnerty@illinois.edu)
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Joseph E. Finnerty: University of Illinois

Chapter 12 in Encyclopedia of Finance, 2022, pp 651-666 from Springer

Abstract: Abstract One of the everyday jobs of the treasurer is to manage the cash, and flow of funds through the organization. If the amount or receipt and collection activities are out of control, the entire firm may face bankruptcy. There is an old saying, “If you pay attention to the pennies, the dollars will take care of themselves.” In this spirit, this chapter looks at taking care of the daily amounts of cash flowing through the firm in a systematic fashion. The purpose is to understand the importance of the inter-relationships involved and to be able to measure the amount and speed of the cash flow. Once something can be measured, it can be managed.

Keywords: Accounts payable; Accounts receivable; Cash flow; Cash flow cycle; Cash management; Flow of funds; Inventory; Marketable securities; Matching principle; Working capital (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/978-3-030-91231-4_12

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