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.
may reduce the value of this work. Finally, the cost of construction of the table of changes in cash is not to neglect. Secondly, it should be noted that it seems hardly possible to descend to the bottom of a month. However, in 30 days cash can go through different situations. This method will never provide a detailed analytical information and accurate actual cash movements. 2 - THE ARRAY OF CHANGES IN CASH IS A SYNTHETIC DOCUMENT. The user may also go further than it’s possible for him in breaking down the basic accounts, it will never reach the knowledge of the actual movement of cash. In this area, it does not seem possible to make the economy of an analytical and chronological of cash flow statement. As we shall see, this is the only way towards a master's degree in the economic balance of the cash flow. On the other hand, jobs and resources table can be an instrument of interesting control at the level of the cash management. 3 - ARRAY OF FINANCING AND CASH BALANCE. By definition, jobs and resources table is the tool of the realization of the investment and financing plan. It ensures that no distortion has occurred between the capital growth and the terms of its funding: it is the variation of working capital which is at the center of the analysis. However we have shown the link between working capital and cash: Therefore: Cash = working capital - needs for working capital. Change in cash balance = (+) change in working capital (-) change in working capital needs. The Funds Applied and Received Table can be broken down into two parts: FUNDS APPLIED FUNDS RECEIVED I – Fixed Funds Applied of the Exercise II - Ressources de financement de l’exercice : - Permanent Assets -Auto finance - Loans and Securities - Transfer of assets - Loans’ Repayment - Loans (+) Change in Working Capital (-) (= II – I) III – Circulating Funds Applied - Operating values - Realizable Values IV – Short term Funds Received Long-term Debts (+) Funds’ changes (-) (Bank Credit) = (II + IV) - ( I + III) (Bank Loan) (+) Changes in Operating capital Requirements (-) (= IV - III) Table n°7: Classification of Funds Applied and Received Variation of the Working Capital Fund provides both the balance of jobs and resources of the two parts of the table. Cash balance depends not only on the balance of flows of exploitation but also of the financial structure of the company. The table of funding highlights therefore, ex-post, the conditions under which the financial balance for a given period is carried out. It allows to know the nature and the value. Page 44 of 124
However, this document synthesizes that variations aggregated on a space of time. It does not reveal how the financial balance has been maintained throughout the period. In other words, how they covered the assets’ needs. Indeed, their coverage depends on the importance of the Fund bearing and the possibilities of short-term debt, i.e. of the policy of investment and financing of the firm. The difficulties of approach to the movement of cash and changes in working capital needs will appear in predictive analysis of cash flows. 1 - THE ANTICIPATION OF THE CONDITIONS FOR THE FINANCIAL BALANCE: CASH FLOW FORECASTING. The traditional techniques of management planning provide, from the consolidation of forecast of cash flows, financing plans and budgets of cash. The procedure which leads to the assessment of cash forecasting involves three essential steps: 1 ° the first stage presents turnover expected movements. This evolution is traced in a funding plan which includes: In 'planned jobs', assets increases and decreases in liabilities; In 'Predicted Funds Applied', liability increases and decreases of assets. He translated the management constraints and choices of the contracted entrepreneur concerning both the operation and development of the company. From these forward-looking changes and taking into account the balance at beginning of period, establishing the forecast supply balance, instrument of control. It allows to compare the financial situation envisaged at the end of the baseline period. An audit of the whole is possible through the cash: It is calculated in the forecast supply balance by difference between the Working Capital Fund and the forecasted working capital requirements; It appears clearly in the financing plans, as can realize in the following document Treasury Treasury Years 20… 20… 20… 20.. Total Investment Program………………..………………..……………………….. Last year Investment program product………………..……………… Diverse charges………………..………………..………………..……………… Extra need of funds………………..………………..…………………………. Reconstitution of working capital fund………………..………………. Due date of Loan………………..………………..………………..……………. Due date of Other loans………………..………………..…………………… Dividends distribution………………..………………..………………………. Reimbursement of loan………………..………………..……………………. Total Needs Increase in Turnover………………..………………..……………………….. New associates’ funds………………..………………..……………………… Diverse resources………………..………………..……………………………. Self-financing before distribution………………..……………………… Working capital funds………………..………………..……………………… Short term loans………………..………………..………………..……………. Other long term loans ………………………………..………………………. Total Resources Difference Accumulated Difference Table n°8: Treasury’s Plan Page 45 of 124
- Page 1 and 2: Page 1 of 124
- Page 3 and 4: The Optimization of the Cash-Treasu
- Page 5 and 6: FOREWORD Nor obtaining the diploma
- Page 7 and 8: Page 7 of 124
- 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 and 18: SECOND PART: THE PRACTICE OF THE CA
- Page 19 and 20: ABSTRACT Inside a world full of ban
- 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: It will similarly be to calculate t
- 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
- Page 69 and 70: Part II: The Practice of the Cash-
- Page 71 and 72: Page 71 of 124
- 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
may reduce <strong>the</strong> value <strong>of</strong> this work. Finally, <strong>the</strong> cost <strong>of</strong> construction <strong>of</strong> <strong>the</strong> table <strong>of</strong> changes in <strong>cash</strong> is not to<br />
neglect.<br />
Secondly, it should be noted that it seems hardly possible to descend to <strong>the</strong> bottom <strong>of</strong> a month. However, in<br />
30 days <strong>cash</strong> can go through different situations. This method will never provide a detailed analytical<br />
information and accurate actual <strong>cash</strong> movements.<br />
2 - THE ARRAY OF CHANGES IN CASH IS A SYNTHETIC DOCUMENT.<br />
The user may also go fur<strong>the</strong>r than it’s possible for him in breaking down <strong>the</strong> basic accounts, it will never reach <strong>the</strong><br />
knowledge <strong>of</strong> <strong>the</strong> actual movement <strong>of</strong> <strong>cash</strong>. In this area, it does not seem possible to make <strong>the</strong> economy <strong>of</strong> an<br />
analytical and chronological <strong>of</strong> <strong>cash</strong> <strong>flow</strong> statement. As we shall see, this is <strong>the</strong> only way towards a master's degree<br />
in <strong>the</strong> economic balance <strong>of</strong> <strong>the</strong> <strong>cash</strong> <strong>flow</strong>. On <strong>the</strong> o<strong>the</strong>r hand, jobs and resources table can be an instrument <strong>of</strong><br />
interesting control at <strong>the</strong> level <strong>of</strong> <strong>the</strong> <strong>cash</strong> management.<br />
3 - ARRAY OF FINANCING AND CASH BALANCE.<br />
By definition, jobs and resources table is <strong>the</strong> tool <strong>of</strong> <strong>the</strong> realization <strong>of</strong> <strong>the</strong> investment and financing plan. It ensures<br />
that no distortion has occurred between <strong>the</strong> capital growth and <strong>the</strong> terms <strong>of</strong> its funding: it is <strong>the</strong> variation <strong>of</strong> working<br />
capital which is at <strong>the</strong> center <strong>of</strong> <strong>the</strong> analysis. However we have shown <strong>the</strong> link between working capital and <strong>cash</strong>:<br />
Therefore:<br />
Cash = working capital - needs for working capital.<br />
Change in <strong>cash</strong> balance = (+) change in working capital (-) change in working capital needs.<br />
The Funds Applied and Received Table can be broken down into two parts:<br />
FUNDS APPLIED<br />
FUNDS RECEIVED<br />
I – Fixed Funds Applied <strong>of</strong> <strong>the</strong> Exercise II - Ressources de financement de l’exercice :<br />
- Permanent Assets<br />
-Auto finance<br />
- Loans and Securities<br />
- Transfer <strong>of</strong> assets<br />
- Loans’ Repayment<br />
- Loans<br />
(+) Change in Working Capital (-)<br />
(= II – I)<br />
III – Circulating Funds Applied<br />
- Operating values<br />
- Realizable Values<br />
IV – Short term Funds Received<br />
Long-term Debts<br />
(+) Funds’ changes (-)<br />
(Bank Credit) = (II + IV) - ( I + III) (Bank Loan)<br />
(+) Changes in Operating capital Requirements<br />
(-) (= IV - III)<br />
Table n°7: Classification <strong>of</strong> Funds Applied and Received<br />
Variation <strong>of</strong> <strong>the</strong> Working Capital Fund provides both <strong>the</strong> balance <strong>of</strong> jobs and resources <strong>of</strong> <strong>the</strong> two parts <strong>of</strong> <strong>the</strong> table.<br />
Cash balance depends not only on <strong>the</strong> balance <strong>of</strong> <strong>flow</strong>s <strong>of</strong> exploitation but also <strong>of</strong> <strong>the</strong> financial structure <strong>of</strong> <strong>the</strong><br />
company. The table <strong>of</strong> funding highlights <strong>the</strong>refore, ex-post, <strong>the</strong> conditions under which <strong>the</strong> financial balance for a<br />
given period is carried out. It allows to know <strong>the</strong> nature and <strong>the</strong> value.<br />
Page 44 <strong>of</strong> 124
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