Cash is the most important lubricant for any business. Without cash, liquidity of the company is endangered. In today’s environment, there are many methods and models to handle cash effectively in the business. Generally certain amount of cash invested at the starting of the business is converted into fixed assets in the form of land, building, plant and machineries, furniture etc. Other portion of cash invested in the business is for purchasing raw materials, payment of wages to the worker and payment of other expenses. Therefore, investment of cash in the production process continued until the revenue comes in the form of sales. Then the business gets its momentum. No further cash is needed if the business changes its level of activities or adopted a new project or profit distributed among the shareholder in the form of dividend or suffered a huge loss. After that cash should be generated in its regular basis to mitigate the expenses. Periodical surplus in the process distributed as dividend.  In the current paper, cash management practices have been discussed with the special reference to the paper sector.

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Keywords: Liquidity, Cash Conversion Cycle, Current Ratio, Dividend, Cash Management.