QUESTION FOUR $[25]$

Business analysts report that poor management is the main reason for business failure. Poor cash management is probably the most frequent stumbling block for entrepreneurs. Understanding the basic concepts of cash flow will help one plan for the unforeseen eventualities that nearly every business faces. It is also important for entrepreneurs to keep the duration of their cash conversion cycles as low as possible. Required:

$4\mathrm{.}1$ Discuss how the preparation of a statement of cash flows could assist in cash management. $(10)$

$4\mathrm{.}2$ Describe FIVE $(5)$ strategies that may be used to reduce the duration of cash conversion cycles. $(15)$