Cash Management in IT Sector - A Study

Abstract

Cash plays a very important role in modern business, specifically a new one. Cash is the life blood of every business. Cash may be in the form of liquid money, bank balance etc. In this respect, cash management is both art as well as science of managing a companys short-term resources for its ongoing activities, mobilizing funds and optimizing liquidity. In this contest another important concept which is related with the cash management is the Treasury technique which emphasizes the liquidity by different factors and processes which convert immediately into cash for increasing profitability. Inefficient cash management may lead the company to bankruptcy. In this paper we highlighted different perspectives by which we can control the corporate cash of the company from Cash Conversion Cycle, Cash Flow, and Creditworthiness point of view. In this paper we tried to interlink among them to control and manage cash well, so that bankruptcy can be prevented and profitability should be improved.

Keywords: Cash Management, Treasury Management, Cash Conversion Cycle, Cash Holding and Creditworthiness

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