Cash is king or so the saying goes and any business person will tell you, this saying is as true today as ever. And managing it is like a high-wire balancing act. If your company’s cash reserves aren’t sufficient, you may wind up short of funds. If your business holds too much cash, the funds are idle and not being pumped back into the company or generating any return.
So what sort of cash flow policy is appropriate for your business?
Fundamentally, there are two opposing approaches to managing cash and other short-term assets: Continue reading
You may remember back in early 2008 the Reserve Bank of Australia (RBA) commenced a series of official interest rate reductions resulting in the cash rate falling
by a total of 4.25%. These levels had not been seen for decades and were a bonanza for home owners and those looking to buy their first property.
Taking into account the single interest rate drop in November 2011, since October 2009
the RBA has raised the cash rate by 1.5% to its current level of 4.5%; however with the effects of erratic global markets on the Australian economy, it’s impossible to guess
what the RBA will do from one month to the next.
With so much uncertainty abounding would fixing your loan rate be a good
decision? Let’s look at the pros and cons. Continue reading