Optimization of the company's cash flow

The cash treasury of BU2 shows a strong variation of the balance; which refers to the stabilization of the same
objective that BU2 required for the company and to the same estimated charges, and also, shows the reliance that
exists between the company and its supplier. Therefore, for what is the financial charges or as called the interest
rates, the amount was generated as followed:
Table n°24: Treasury’s balance for BU2
This figure represents a sample of how the interest charges look like on the BU2 cash treasury, with an amount of
7 408, 29 DHS the company generated a high rate interest for the new business.
The major question that we’re supposed to be asking is wither the company can support that amount of cash on
every transaction knowing that they already have others on the scales interest rate for the first activity? Usually, the
two activities are similar with each one’s effect on the other, which leads to discover the effect of one treasury on
another after merging both in the company. Thus, the management of cash at this timing would be executed the
same way it has been done all the previous year, but instead of controlling one cash-policy we’ll manage both, or
make it one big policy with 2 different suppliers; after all, the principle has stood the same, but the only change in
this would be the execution of this charges on the field knowing that instead of having one financial cost on the
operation of transaction or other, we’ll have two, and instead of paying two banks we’ll be in front of three banks,
but the simulation’s major role is to give the optimal and rational image of perfect treasury that make the company
gather the both suppliers under the same treasury cash management without losing the financial advantages that
are given on both activities. The next paragraph will clarify more this operation of merging and its impact on the
company’s financial situation.
3. The merging of the two treasuries, BU1 and BU2:
After having the first graphic of IWACO’s financial situation without merging the both treasuries, where we noticed
that the company could’ve achieved the most optimized situation in which they managed the use of the overdraft
over the whole year 2016 (estimated), this merging, means the extra add of a new treasury on a new one would have
definitely an effect (positive or negative) on the original treasury and on the use of the overdraft over the year.
The merging was by adding the new condition of BU2 in the original treasury of the company with the same
company’s financial situation. This operation was done by adding the purchases and sales amount of the company
BU2 supplier to the original treasury plan, and then the evaluation was based on final balance that the company
could get from the operation of merging. The following graphic is the representation of this new financial balance
based on the merging operation:
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