Optimization of the company's cash flow

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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: Page 114 of 124
Figure n°18: Daly Balance of IWACO and BU2 5 000 000,00 DH 0,00 DH -5 000 000,00 DH -10 000 000,00 DH -15 000 000,00 DH -20 000 000,00 DH -25 000 000,00 DH -30 000 000,00 DH -35 000 000,00 DH -40 000 000,00 DH -45 000 000,00 DH -50 000 000,00 DH As we could see, the treasury after having more than 8 months overused the overdraft, now the company achieved only two times full use of the overdraft, which means that the first effect of the merging operation is the extra space of using cash or overdraft. B. CONSEQUENCES OF MERGING THE TWO TREASURIES; BU1 AND BU2 1. Effect of synergy The merging of the two suppliers in the same treasury has, indeed impacted the company’s financial situation and therefore their decisions. Although, the financial environment on which the company appears force the it to behave according to the final statement that the company presents for the high authorities in order to keep a certain balance outside the firm, especially with the existence of other competitors on the market. The high rate on which this company is active is up to 5.35% of the interest rate, and the interests are the most valuable charges that the company calculates before jumping into any kind of business. The cash treasury manager has a first role in the control and optimization of the financial charges. In order to have an insider equilibrium of the company, the company’s often called to make the contracted banks of the company satisfied of the company’s financial situation. In the previous chapter, we’ve seen how the bank charges are calculated and how they’re important for the bank’s accounts. As a first recall, these charges are maintained in a high level of the calculations that is divided into two part: the first one back to the used overdraft; an amount of cash that the bank allows the company to use in order to make its casual activities ON and also to maintain the security level of staying alive on the market, although, the company up grade sometime this overdraft in order to expand its activity or to maintain the financial equilibrium inside the company with the given amount of purchases of the first supplier BU1. The charges of this overdraft are established based on a rate of 5.35% interest rate, and the challenge of the company’s financial administration is to completely use the overdraft; in one, hand that allows the company to maintain its profit from purchases with every transaction, and from the other hand, more the company use totally the overdraft the more it guaranty chances of negotiating the up-grade of the overdraft line. Second level is related to the cash money; as it’s known for the company, one the financial policies that give the company opportunities to gain financial advantages is that when the company buys from the supplier purchases and pay it on the due time in cash, it gains 0.5% of the paid amount; means that if the company paid 20.000.000 DHS of cash, 100.000 DHS of this amount stays at the company’s treasury, while if they pay it using the overdraft, the company get to pay 2 972.22 Page 115 of 124
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The Optimization of the Cash-Treasu
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FOREWORD Nor obtaining the diploma
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This project research is dedicated
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LIST OF ACRONYMS AND ABBREVIATION
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Figure n°1: Determination of the o
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TABLE OF CONTENTS Foreword ........
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SECOND PART: THE PRACTICE OF THE CA
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ABSTRACT Inside a world full of ban
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In addition, the monetary risk is a
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A good financial situation is chara
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Experience and observation prove th
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Whereas part of stocks was practica
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C = ax² + bx + c When the demand a
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The “Stocks” flow time: Average
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It indicates to what extent the rea
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RESULTS + FINANCIAL INTERESTS / FIN
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ANNUAL SALES H.T / NET FIXED ASSETS
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4 - LIMITS THE PREDICTIVE VALUE OF
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This opposition led to the establis
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It will similarly be to calculate t
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However, this document synthesizes
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The cash has then for each day (or
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(b) SHORT-TERM DATA: Beyond the ver
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These three presentations are well
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Manage cash consists, in the tradit
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Anyway many authors have developed
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Either they consist on interest or
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(a) Economies of scale in the deten
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Type of Risk Analyze the Risk Evalu
Page 63 and 64: They may have originated an investm
Page 65 and 66: I. PRESENTATION OF THE ANALYSIS MOD
Page 67 and 68: II. DATA COLLECTION TOOLS For what
Page 69 and 70: Part II: The Practice of the Cash-
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Page 73 and 74: 8. Development: Currently, this dep
Page 75 and 76: B. Dynamical competition While the
Page 77 and 78: 1.2 - The existence and the importa
Page 79 and 80: December - 2014 0,00 DH 1 599 918,6
Page 81 and 82: (a) Four sources of costs can be id
Page 83 and 84: 20 000 000,00 DH Figure n°5: INFLO
Page 85 and 86: Therefore; when the company realize
Page 87 and 88: implementing rules are poorly known
Page 89 and 90: Regardless of the method chosen, it
Page 91 and 92: date, but whose amount is known (e.
Page 93 and 94: 30% of the Turnover in the fifth pe
Page 95 and 96: OVERDRAFT’S COSTS = [33.000.000 D
Page 97 and 98: 3 ° - The Customer-Loan Control Co
Page 99 and 100: Profitability is the guarantee of t
Page 101 and 102: (b) The Positive Effect. Swelling o
Page 103 and 104: 2.2 - The influence of investment o
Page 105 and 106: There are thus two sets of 12 month
Page 107 and 108: S = The starting stock (possibly) +
Page 109 and 110: This chart is reserved to make clea
Page 111 and 112: operation wasn’t beneficial enoug
Page 113: 50% is paid to the supplier 14 days
Page 117 and 118: Regarding the previous chapters, an
Page 119 and 120: THE CONCLUSION Page 119 of 124
Page 121 and 122: Investment and its financing, Trai
Page 123 and 124: BOOKS: http://tel.archives-ouverte
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