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How is optimum cash balance maintained?
One of the important objectives of cash management is to maintain an optimum level of cash balance and the tools available with the company to ensure the maintenance of optimum level of cash balance is to prepare cash budget. Cash balance either in excess or shortage of it has its own consequences. Thus by preparing the cash budget, the company can have an idea in advance the requirement and the amount of cash which will be required by the company at any given point of time. On the basis of which company can further take its decision of investing excess cash or to meet the shortfall
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