Which of the following is a key function of cash management?

Ensuring liquidity for operational needs is a fundamental function of cash management because it plays a crucial role in maintaining smooth business operations. Liquidity refers to the ease with which a company can convert its assets into cash to meet short-term obligations. Having sufficient liquidity allows an organization to cover its day-to-day expenses, pay suppliers, and address any unforeseen financial challenges that may arise.

Effective cash management includes monitoring cash flows, predicting future cash requirements, and ensuring that there are adequate cash reserves available when needed. By focusing on liquidity, a company can avoid potential cash shortages that might disrupt operations, leading to missed opportunities, delayed payments, or even insolvency.

In contrast, forecasting capital investments relates more to long-term financial planning and risk assessment rather than immediate operational cash flow requirements. Evaluating market share pertains to understanding competitive performance in the market, not directly tied to cash management strategies. Managing strategic partnerships focuses on relationships with other organizations, which is important for business growth but separate from the core objectives of cash management.