From the course: Finance for Non-Financial Managers

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Managing cash through the operating cycle

Managing cash through the operating cycle

From the course: Finance for Non-Financial Managers

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Managing cash through the operating cycle

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- Numbers, person or not. Everyone knows that cash is the lifeblood of a business. - You can have a great marketing plan. You can have a great location. You can have a great product or service, but if you don't turn your cash into more cash, you're not going to be in business for very long. - Let's talk about a company's operating cycle. How long it takes from when a company buys inventory, sells that inventory, and then collects the cash from that sale. - If the operating cycle is too long, things get pretty tough, pretty quick for a company. In other words, if cash is tied up in non-cash assets, such as accounts receivable and inventory, then it's not available to utilize in the business. - [Host 2] Remember, when we're talking about finance, we're talking about identifying those resources that we need, determining the best way to get the money to buy those resources, and then managing those resources effectively. - To manage those resources, we need detailed, timely information…

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