Define 'cash management'.

Cash management refers to the collection, handling, and usage of cash in a business to ensure liquidity and avoid cash shortfalls. It is a crucial aspect of financial management, as effective cash management ensures that a business has sufficient cash available to meet its obligations, such as paying bills, salaries, and other operating expenses. Proper cash management involves monitoring cash balances, forecasting cash flow, and implementing strategies to optimize cash usage.

This definition encompasses various activities, including managing cash reserves, controlling receivables and payables, and planning for cash needs. By maintaining a healthy cash flow, businesses can prevent situations that might lead to financial distress while also taking advantage of opportunities that may require immediate funding.

The other options do not capture the full essence of cash management. Encouraging automatic bank deductions pertains to specific procedures rather than the comprehensive handling of cash. Investing company profits into stocks represents a completely different area of financial management—investment rather than management of cash flow. Lastly, while forecasting future cash inflows and outflows is undoubtedly a vital aspect of cash management, it constitutes only part of the broader definition.