example how to maintain a minimum cash balance
The minimum cash balance you select is somewhat arbitrary, and is a function of sales, industry, and other unquantifiable factors. For example, some business activities are cash-intensive, while others are not. Minimum cash balances might range anywhere from 2% to 10% of sales. Company management will have a pretty good idea of what figure to use, as might more senior investment bankers. In any case, don't lose any sleep over this number.