Optimization of the company's cash flow
This book is about the company's treasuries and financial management, more specifically; it shows how a company can manage its treasury in an efficient and short way. This book is about the company's treasuries and financial management, more specifically; it shows how a company can manage its treasury in an efficient and short way.
CHAPTER 6: TREASURY AND FINANCIAL POLICY OF THE FIRM ................................................................................... 98 SECTION I: THE CONDITIONS OF THE COMPANY’S LIQUIDITY .................................................................................... 98 I. The management of cash flow .................................................................................................................. 98 A. Control of the formalization of cash-flows ......................................................................................... 98 1. The conditions of formalization of cash-flows ............................................................................. 98 2. The effects of investment on the cash flows.............................................................................. 101 B. Investment of cash-flows .................................................................................................................. 104 1. Cash-treasury and investment policies, BU1 and BU2 ............................................................... 104 2. Definition of the BU2 .................................................................................................................. 108 SECTION 2: EVALUATION OF FINANCIAL SITUATION OF THE FIRM .......................................................................... 108 A. Arbitration of the financial position of the cash ............................................................................................ 108 1. Creation of a new treasury: BU2’s treasury ............................................................................................ 111 2. Evaluation of the financial situation of the firm after BU2 integration .................................................. 113 3. The merging of the two treasuries; BU1 and BU2 ................................................................................... 115 B. Consequences of merging the two treasuries; BU1 and BU2 ........................................................................ 115 1. Effect of synergy ...................................................................................................................................... 115 2. Global treasury’s issue: Optimization ...................................................................................................... 116 3. Impacts of the merging ........................................................................................................................... 117 C. Recommendations ......................................................................................................................................... 117 CONCLUSION .............................................................................................................................................................. 119 BIBLIOGRAPHY ............................................................................................................................................................ 122 Page 18 of 124
ABSTRACT Inside a world full of banking institutions, corporation, investments, brokers, dealers, providers…in a world where everybody’s looking for making profit, conflicts takes part and impact negatively the waiting results. Each one’s trying harder to make his own part of the cake bigger than the other, making struggles for others and taking advantage of the minimum of opportunities, some of them realize that the main objective of all this isn’t necessarily following where the opportunity shows or where the gain is more profitable, but more; where the flows can stay on the market for the longest period. The main objective of this project research is to eventually prove the point that profit can be made by a company’s own money and still can resist the biggest crisis. Here, the result of this research is to show that the company can be delegated to manage its inside cash flows or as called in this book “Treasury” in a simple operation called “Optimization of the Cash-Treasury”. KEY WORDS Treasury, Cash-treasury, Inflows, Outflows, Liabilities, Assets, Turnover, Investment, Risk, Optimization, Arbitration, Minimization, Maximization, Fund, Working Capital Fund, Ratio, Solvency, Liquidity, Forecast, Flows, Balance, Securities, Value, Prediction, Variation, Resource, Needs, Estimation, Stock, Volume, Reserve, Transfer, Equilibrium, Supplier, Provider, Interest, Funds, Savings, Cost, Idle cash, Bank, Rates, Structure, Services, Due date, Value date, Slowdown, Debts, Loans, Credit, Debit, Cash. Page 19 of 124
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- Page 3 and 4: The Optimization of the Cash-Treasu
- Page 5 and 6: FOREWORD Nor obtaining the diploma
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- Page 9 and 10: This project research is dedicated
- Page 11 and 12: LIST OF ACRONYMS AND ABBREVIATION
- Page 13 and 14: Figure n°1: Determination of the o
- Page 15 and 16: TABLE OF CONTENTS Foreword ........
- Page 17: SECOND PART: THE PRACTICE OF THE CA
- Page 21 and 22: In addition, the monetary risk is a
- Page 23 and 24: A good financial situation is chara
- Page 25 and 26: Experience and observation prove th
- Page 27 and 28: Whereas part of stocks was practica
- Page 29 and 30: C = ax² + bx + c When the demand a
- Page 31 and 32: The “Stocks” flow time: Average
- Page 33 and 34: It indicates to what extent the rea
- Page 35 and 36: RESULTS + FINANCIAL INTERESTS / FIN
- Page 37 and 38: ANNUAL SALES H.T / NET FIXED ASSETS
- Page 39 and 40: 4 - LIMITS THE PREDICTIVE VALUE OF
- Page 41 and 42: This opposition led to the establis
- Page 43 and 44: It will similarly be to calculate t
- Page 45 and 46: However, this document synthesizes
- Page 47 and 48: The cash has then for each day (or
- Page 49 and 50: (b) SHORT-TERM DATA: Beyond the ver
- Page 51 and 52: These three presentations are well
- Page 53 and 54: Manage cash consists, in the tradit
- Page 55 and 56: Anyway many authors have developed
- Page 57 and 58: Either they consist on interest or
- Page 59 and 60: (a) Economies of scale in the deten
- Page 61 and 62: 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
CHAPTER 6: TREASURY AND FINANCIAL POLICY OF THE FIRM ................................................................................... 98<br />
SECTION I: THE CONDITIONS OF THE COMPANY’S LIQUIDITY .................................................................................... 98<br />
I. The management <strong>of</strong> <strong>cash</strong> <strong>flow</strong> .................................................................................................................. 98<br />
A. Control <strong>of</strong> <strong>the</strong> formalization <strong>of</strong> <strong>cash</strong>-<strong>flow</strong>s ......................................................................................... 98<br />
1. The conditions <strong>of</strong> formalization <strong>of</strong> <strong>cash</strong>-<strong>flow</strong>s ............................................................................. 98<br />
2. The effects <strong>of</strong> investment on <strong>the</strong> <strong>cash</strong> <strong>flow</strong>s.............................................................................. 101<br />
B. Investment <strong>of</strong> <strong>cash</strong>-<strong>flow</strong>s .................................................................................................................. 104<br />
1. Cash-treasury and investment policies, BU1 and BU2 ............................................................... 104<br />
2. Definition <strong>of</strong> <strong>the</strong> BU2 .................................................................................................................. 108<br />
SECTION 2: EVALUATION OF FINANCIAL SITUATION OF THE FIRM .......................................................................... 108<br />
A. Arbitration <strong>of</strong> <strong>the</strong> financial position <strong>of</strong> <strong>the</strong> <strong>cash</strong> ............................................................................................ 108<br />
1. Creation <strong>of</strong> a new treasury: BU2’s treasury ............................................................................................ 111<br />
2. Evaluation <strong>of</strong> <strong>the</strong> financial situation <strong>of</strong> <strong>the</strong> firm after BU2 integration .................................................. 113<br />
3. The merging <strong>of</strong> <strong>the</strong> two treasuries; BU1 and BU2 ................................................................................... 115<br />
B. Consequences <strong>of</strong> merging <strong>the</strong> two treasuries; BU1 and BU2 ........................................................................ 115<br />
1. Effect <strong>of</strong> synergy ...................................................................................................................................... 115<br />
2. Global treasury’s issue: <strong>Optimization</strong> ...................................................................................................... 116<br />
3. Impacts <strong>of</strong> <strong>the</strong> merging ........................................................................................................................... 117<br />
C. Recommendations ......................................................................................................................................... 117<br />
CONCLUSION .............................................................................................................................................................. 119<br />
BIBLIOGRAPHY ............................................................................................................................................................ 122<br />
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