- This topic has 1 reply, 2 voices, and was last updated 7 years ago by .
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.
OpenTuition recommends the new interactive BPP books for June 2024 exams, Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Cash surplus
Hi sir, for cash surplus whether its short term cash surplus or long term cash surplus it should earn a return by being invested, without risk of capital loss because these funds will be required for the company’s working capital needs right ?
Or does this only apply to short term cash surplus ?
Any surplus cash should either be invested (or used to repay borrowings).
However long-term cash should be invested in long-term assets – i.e. to (for example) by more machines and therefore increase profitability.
Short-term cash should be invested short-term if it is going to be needed to finance working capital.