Which of the following is considered useful information for managing cash in an organization?

• A. List of employee training programs
• B. A detailed cash flow forecast for the upcoming quarter
• C. Inventory turnover ratios from the previous year
• D. Historical depreciation schedules of fixed assets

Answer: (B)

Verified step by step guidance

1. Understand the concept of cash management: Cash management involves planning, monitoring, and controlling cash flows to ensure the organization has sufficient liquidity to meet its obligations and optimize its financial position.
2. Evaluate the options provided: Analyze each option to determine its relevance to cash management. For example, employee training programs are not directly related to cash management, while a detailed cash flow forecast provides actionable insights into future cash inflows and outflows.
3. Focus on the importance of cash flow forecasting: A cash flow forecast helps predict the timing and amount of cash inflows and outflows, enabling the organization to plan for potential shortfalls or surpluses. This is critical for managing liquidity effectively.
4. Consider the other options: Inventory turnover ratios and historical depreciation schedules are useful for other aspects of financial analysis, such as inventory management and asset valuation, but they do not directly assist in managing cash flows.
5. Conclude that the most useful information for managing cash is the detailed cash flow forecast for the upcoming quarter, as it provides actionable insights into the organization's liquidity position and helps in decision-making.