The correct answer is D. Buying less insurance.
Cash planning is the process of forecasting and managing a company’s cash flow. It involves estimating future cash receipts and disbursements, and then developing a plan to ensure that the company has enough cash to meet its obligations.
A key part of cash planning is predicting future expenses. This involves estimating the costs of goods sold, operating expenses, and capital expenditures. The company must also consider the timing of these expenses, as some expenses may be incurred in advance of revenue being generated.
Buying less insurance is not a part of cash planning. Insurance is a way to protect against unexpected losses. It is not a way to generate cash. In fact, insurance premiums are a type of expense that must be included in cash planning.
Here are some additional details about each of the options:
- Option A: Managing income and expenditure flow is a key part of cash planning. The company must track its income and expenses in order to forecast future cash flow.
- Option B: Creating surplus for capital investment is also a key part of cash planning. The company must have enough cash on hand to cover its operating expenses and to make capital investments.
- Option C: Predicting future expenses is a key part of cash planning. The company must estimate its future expenses in order to forecast future cash flow.
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