Optimization of the company's cash flow

SECTION II: THE CONDITIONS OF FINANCIAL EQUILIBRIUM ....................................................................................... 39
I. The prospective analysis of the variations of cash: The explanation of the financial balance ................. 40
A. The flow of fund accounting ............................................................................................................... 40
1. Historic Flows ............................................................................................................................... 40
2. The flows of operations ................................................................................................................ 41
B. Accounting flows and Cash-Flow ........................................................................................................ 41
1. The implicit assumptions of assimilation of accounting flows to cash-flows .............................. 41
2. The limits to the assimilation of accounting flows to cash-flows................................................. 42
C. The limits of analysis of the “Variations of Cash” .............................................................................. 43
1. The array of variations of cash is actually a static document ...................................................... 43
2. The array of changes in Cash is synthetic document ................................................................... 44
3. Array of financing and cash balance ............................................................................................. 44
3.1. The Method “Revenue – Expenses” ..................................................................................... 46
3.1.1. The principle of the method ..................................................................................... 46
3.1.2. Limitations of the method ........................................................................................ 48
3.2. Prediction method “Resources –Needs” .............................................................................. 49
3.2.1. Presentation of the cash flow forecast in terms of “Resources and Needs” ........... 50
3.2.2. Estimates of cash flows in terms of “Resources needs” .......................................... 51
CHAPTER 2: MONETARY INFLOWS AND CASH-TREASURY .......................................................................................... 53
SECTION I: MONETARY CASH OF THE FIRM ................................................................................................................. 53
I. Preference for liquidity and inventory management ................................................................................ 53
A. Ground for cash, and detention of liquidity ....................................................................................... 54
1. The reasons for detention of liquidity .......................................................................................... 54
2. The formalization of the monetary stock ..................................................................................... 54
3. The structure of Cash ................................................................................................................... 54
B. The essential variables involved in the determination of the optimal amount of cash ..................... 55
1. The nature, behavior and volume of the cash-flows ................................................................... 55
2. Transaction costs and revenues associated with the “Securities” .............................................. 55
3. The duration of the period of the cash flows forecast ................................................................. 56
4. Minimum critical balance of cash ................................................................................................. 56
5. The chosen safety margin ............................................................................................................ 57
C. Modelization of the company’s monetary inflows management ....................................................... 57
1. The concept of “Cash Reserve” rethink ........................................................................................ 58
1.1. The failures of analysis to prove the existence of reserves inside IWACO’s treasury ........... 58
1.2. Dsynchronization of cash flow and liquidity detention ......................................................... 59
1.3. The assumption of the unexpected and the detention of liquidity ....................................... 60
2. The treasury-cash funding using the stock management ............................................................ 61
2.1. The “Transfer Policy” as an equilibrium tool of cash-treasury: Transfer inert-agencies ....... 61
2.2. The assumption of the homogeneous nature of the funds ................................................... 62
CHAPTER 3: METHODOLOGY OF THE STUDY ............................................................................................................... 64
I. Presentation of the study .......................................................................................................................... 64
II. Data collection tools .................................................................................................................................. 67
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