The First Step in Managing Cash More Effectively Is

question 103

Multiple Choice

The first step in managing cash more effectively is:

• A)having an adequate cash reserve for emergency expenditures.
• B)rapid payment of accounts payable.
• C)speeding up payment of accounts receivable.
• D)understanding the company's cash flow cycle.

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Definitions:

Special Dividend

A one-time distribution of earnings to shareholders, oftentimes an indication of excess cash the company wants to return.

Homemade Dividend

A concept where investors create their own dividend policy by selling a portion of their portfolio of equities instead of relying on company-issued dividends.

Liquidating Dividend

A type of dividend paid by a company that is returning a portion of the capital to its shareholders, typically during dissolution.

Price/earnings Ratio

The Price/Earnings Ratio (P/E Ratio) is a valuation metric that compares the current share price of a company to its per-share earnings, used by investors to evaluate the investment attractiveness of a company.