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3 years ago

Which of the following BEST describes a company's proper liquidity management?

Business

2 answers:

777dan777 [17]3 years ago

7 0

Answer:

The correct answer is letter "A": Liquidity management is a balancing act; managers try to find liquidity levels that are neither too high not too low.

Explanation:

Liquidity management implies companies lowering their risks. This is achieved by having enough cash to leverage the debts incurred because of the business operations. Especially when it comes to banks, liquidity implies the financial institution possessing enough collateral to offset potential risks of not being returned money loaned.

Naddika [18.5K]3 years ago

4 0

Answer:

A. Liquidity management is a balancing act, managers try to find liquidity levels that are neither too high not too low.

Explanation:

Maintaining proper liquidity is an important financial objective of management. Proper liquidity management demands that an entity should be able to meet his short term financial obligation and making sure that liquid assets of the entity are not idle. In order to achieve this, the best way to go is to maintain a level that is neither too high and not too low. Not too high means the entity is not holding too much cash or liquid assets than it currently need to meet its short term financial obligation.

For example, not keeping too much cash in current account but investing them in interest-earning investment assets.

Not too low means the cash or liquid assets held by an entity should not less than the amount needed to meet its short term financial obligation. For example, making sure that the entity has enough cash or readily convertible liquid assets that can be used to pay vendors, rent, interest and meet other short term financial obligation.

Option B is false because keeping too much does not help to maximize short term earnings which is a feature of proper liquidity management. Option C is wrong because there is no guideline to support that deferring coupon payment won`t attract payment and this does not connote proper liquidity management.

Option D is obviously false and does not describe proper liquidity management.

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Nature's Garden, a new restaurant situated on a busy highway in Pomona, California, specializes in a chef's salad selling for $7

mestny [16]

Answer:

Nature's Garden

a. Determination of the current average cost per meal:

Variable cost per meal = $3,800 ($4 x 950) based on full capacity

Fixed costs per day = $1,710

Total costs = $5,510

Average cost per meal = $5,510/950 = $5.80

b. Girl Scouts' offer of $150 for 30 girls:

Offered price per person = $5 ($150/30)

Projecting a loss of $0.60 per meal, this gives a total loss of $18 ($0.60 x 30)

Projected revenue from the offer = $150 + $18 = $168

Projected revenue per meal = $168/30 = $5.60

Actual revenue to be received per meal = $5.00

Loss of $0.60

The owner arrived at the $0.60 loss because his total costs per meal was $5.60.

c. Since the variable cost per meal is $4, the restaurant owner could accept the offer if the additional 300 meals will not increase his daily fixed costs due to lack of capacity. If the fixed costs increase with this addition, then it may not be reasonable to accept the offer. Based on this offer, the contribution to defraying fixed costs, given present capacity, is only $0.50 ($4.50 - $4) per meal.

Explanation:

Selling price of chef's salad = $7

Daily fixed costs = $1,710

Variable costs per meal = $4

Meals capacity per day = 950

Average meals = 900

Nature's Garden has a fixed cost of $1,710 based on current capacity of 950 meals per day. The fixed cost may increase with increasing capacity. This fact must be borne in mind when making decisions.

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4 years ago

All of the following are liabilities except

dolphi86 [110]

Answer:

Accounts receivable

Explanation:

Accounts receivable is a component or part of the current assets. It is the amount that is created by selling the goods on account. Such receipts are receivable within the duration of one year.

Salaries payable is a part of current liabilities.

Notes payable is also a part of current liabilities.

Similarly, accounts payable is also a part of current liabilities.

Such payments are payable within the duration of one year.

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4 years ago

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lesya692 [45]

Answer:

The appropriate approach is "Developing strategic plan ".

Explanation:

Knowing what it does and reevaluating it to ensure that it is the leading northern star for certain activities seems to be the secret to creating a successful strategic planning strategy.
This strategy includes defining the intent, strategies, and procedures of an organization which would be used to achieve those objectives. As such, this strategy seems to be an important aspect of the operation of an organization, even though it is necessary to undertake the process of designing the schedule with serious thought and thoroughness.

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3 years ago

Which of the following types of child care is most closely regulated by state and county government? A. Child care center B. Fam

Montano1993 [528]

I think this will be A ;)

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Alexxandr [17]

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