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Financial risk prevention in businesses entails the ability to discover, analyse and manage any form of financial risks that could affect corporate operations by identifying possible challenges with cash flow, inventories and other resources. This level of protection against these financial risks can be achieved by adopting cash and inventory management strategies. The study was conducted to ascertain cash and inventory as a catalyst for working capital management for prevention of financial risk of small-scale operators. The study employed survey research design with a total of 426 respondents, comprising 336 small-scale enterprise (SSE) operators, 20 accounting lecturers and 70 professional accountants in Imo State using Slovin’s formula and quota sampling technique. To answer the study objectives, mean ([Formula: see text]) and standard deviation were employed to analyse the data, whereas ANOVA was used to test the two null hypotheses at the 0.05 level of significance. The study found that small-scale operators optimise their cash flows by implementing cash and inventory management controls, which assists in predicting and minimising unforeseen expenditures. Based on the findings, it was suggested that small-scale operators should update their knowledge of new technologies and training in order to enhance their competence in managing business cash flow for optimum sustainability.

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