According to your book Financial Management for Small Businesses, 2nd OER Edition, In the management of cash and marketable securities, why should the primary concern be for safety and liquidity rather than maximization of profit?

According to your book Financial Management for Small Businesses, 2nd OER Edition, In the management of cash and marketable securities, why should the primary concern be for safety and liquidity rather than maximization of profit?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

According to your book Financial Management for Small Businesses, 2nd OER Edition, In the management of cash and marketable securities, why should the primary concern be for safety and liquidity rather than maximization of profit?

Approach to decide on the efficient procurement and investment of funds for the day-to-day operations of a business. Financial management aims at profit maximization, and it includes financing and capital budgeting.

Expert Solution

Step 1: Introduction:

Cash management: Cash management is the process of controlling an organization's cash flows. It entails the control of cash payments and receipts. In other words, it refers to having control over the income-collecting process and the payment of expenses or liabilities.

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