Financial management Essay Example | Topics and Well Written Essays - 500 words - 2

Financial management - Essay ExampleThis is due to the opinion extended in the first month of the operations. Moreover, the credit should equal toCBM has performed extremely head during the course of 9-months. Their cash collecting policy has worked well in generating abounding cash for the following months. The cash collected has been incremental due to rising revenues. The friendship has low uncertainty in its revenue stream which locates them in a good position to finance their fixed assets requirement at appropriate time of the year. (Gitman, 2007)The minimum cash policy at the end of the month has served them well in making payments on time. On average they have surpassed their minimum cash requirement by a substantial margin which is a optimistic sign for any credit lending firm. The only month which has brought up concerns due to operational activities is April where the company had a cash deficit of $7,500. (Horngren, 2008) Other than April, the company has been in a cas h deficit in June which was primarily because of investment in plant and income tax payment which totaled to $150,000. These expenses occur once or twice a year therefore it is understandable to have a cash deficit for that month. Other than these abnormal payments, the company has fixed payments totaling to $60,000 which encompasses salaries, lease and mixed costs (Brigham & Houston, 2009). Over the 9 months, they have been successful in making the fixed payments as well as the variable payments effectively.As a trust manager, I would like CBM to be my client for three reasons. Firstly, keeping in view their cash budget, the company has been experiencing growth in their revenues during the entire course. This creates positive sentiments approximately the company and one can project its prospective future. Moreover, growth in revenue could also indicate growing market share and increase in power over price. (Proctor, 2009)Secondly, their cash collection policy has been stringent. They have collected