Evaluation of cash and credit management policies as an instrument for avoiding illiquidity and liquidation

Thesis Abstract

Abstract
Cash and credit management are crucial aspects of financial management for any organization. Effective cash and credit management policies play a significant role in ensuring a company's liquidity and avoiding situations of illiquidity that may lead to liquidation. This research project aims to evaluate the impact of cash and credit management policies as instruments for avoiding illiquidity and liquidation in businesses. The research will involve an in-depth analysis of different cash management techniques such as cash flow forecasting, working capital management, and inventory management. It will also examine various credit management strategies including credit evaluation, credit terms, and collection policies. By evaluating these policies, the study intends to provide insights into how companies can optimize their cash and credit management practices to maintain adequate liquidity levels and prevent financial distress. The research will utilize a combination of quantitative and qualitative methodologies to assess the effectiveness of cash and credit management policies in different business settings. Financial data from companies across various industries will be analyzed to identify the relationship between cash and credit management practices and the likelihood of facing illiquidity and liquidation. In addition, interviews with finance professionals and industry experts will be conducted to gather valuable insights and perspectives on the importance of cash and credit management in ensuring financial stability. The findings of this research project are expected to contribute to the existing body of knowledge on financial management by highlighting the significance of cash and credit management policies in avoiding illiquidity and liquidation. The study will provide practical recommendations for businesses to enhance their cash and credit management practices, ultimately improving their financial health and sustainability. Overall, this research project seeks to shed light on the critical role of cash and credit management in safeguarding businesses against the risks of illiquidity and potential liquidation. By understanding the impact of effective cash and credit management policies, companies can proactively manage their financial resources and mitigate the challenges associated with cash flow fluctuations and credit risks.