International cash management involves balancing liquidity and profitability from "summary" of International Financial Management, Abridged Edition by Jeff Madura
International cash management is a critical aspect of managing a multinational corporation's financial resources. It involves finding a delicate balance between maintaining sufficient liquidity to meet short-term obligations and maximizing profitability by investing excess cash. Liquidity refers to the ability of a firm to meet its short-term financial obligations as they come due. Maintaining adequate liquidity is essential to ensure that a company can pay its bills, meet payroll, and cover other operating expenses. However, holding too much cash can be detrimental to profitability, as idle cash does not generate returns for the firm. On the other hand, profitabili...
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