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.
The nature and duration of the funding must correspond exactly to the nature and the duration of the need to finance. Hence the need to be able to measure: Firstly, the needs permanent financing (fixed assets and current assets), as well as the needs transitional (current assets mainly); And secondly, the stability of the financial resources available to the firm (equity and external competition of all origins). Insofar as the contractor will be able to adjust to each other, it reconciles the objectives, required until there as antagonistic, solvency and profitability. Page 52 of 124
Manage cash consists, in the traditional design, on determining the amount of cash to hold at the beginning of the period which, taking into account the revenue and expenditure of the global businesses that the company exercises, will be necessary for the implementation of the budget. Theoretical solutions to this question found in the literature, are many and varied. This is explained by the relative ease with which one can model optimization problems, thanks to the existence of mathematical tools of investigation already in use also. In this case, the authors have transposed the logic of analysis of the inventory control, quantitative analysis of the Keynesian approach of 'preference for liquidity. This problem is equivalent to setting the conflict between, on the one hand, excessive cash that involves an opportunity cost, and, on the other hand, insufficient cash resulting in a cost of insolvency. However, although appealing intellectually, this approach is based on a number of explicit and implicit assumptions that practice business is not checked. Maintaining important liquidity goes against the objective of cost-effectiveness insofar as the funds tied up in liquid assets have in general no, or very low profitability. In addition, a plentiful cash cannot be in any case, contrary to what was long stated, as the guarantee of financial security of a company, i.e. nor as a guarantee of its solvency, nor as the insurance of its autonomy. The security of a business depends above all on the cash flow released that it is capable of secreting, or if one prefers its potential to restore liquidity. Its profitability is therefore the necessary condition for its security. But we will see that this condition is not sufficient. Solvency and profitability do oppose no more long term in the short term. The company must exercise a tight administrative control to manage its cash flow. The synchronization of the cash flows and the choice of day to day financing, on the one hand ensures the solvency of the firm and on the other to improve its profitability. Indeed control of cash forecasting, financing in the short term, as well as the coordination of banking to aim at the reduction of monetary assets to zero. This is what we will show in the three sections that follow. In other words, a company that has permanently cash void or fluctuating slightly around zero can be considered, in the first analysis, financially well managed. This means, all other things being equal, as makers: Master cash flows Effectively reallocate cash flow released in profitable jobs, Enjoy more than just their funding needs, Negotiate the best terms of Bank. I’ll try to show in this part that by minimizing the volume of monetary assets, the company reconciles the objectives of security and profitability. This goal will be achieved in conditions of liquidity and profitability by an extensive improvement of cash forecasting. SECTION 1: MONETARY CASH FROM THE FIRM. The company’s business activity must keep a certain "stock of currency", to deal with all moment to the expenses that it must or wish to achieve. I - PREFERENCE FOR LIQUIDITY AND INVENTORY MANAGEMENT. If we could predict the future perfectly, and disbursements were synchronized to the receipts, it would be unnecessary to provide a pool of means of Exchange. Page 53 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 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: These three presentations are well
- 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
- 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
The nature and duration <strong>of</strong> <strong>the</strong> funding must correspond exactly to <strong>the</strong> nature and <strong>the</strong> duration <strong>of</strong> <strong>the</strong> need to<br />
finance. Hence <strong>the</strong> need to be able to measure:<br />
Firstly, <strong>the</strong> needs permanent financing (fixed assets and current assets), as well as <strong>the</strong> needs transitional<br />
(current assets mainly);<br />
And secondly, <strong>the</strong> stability <strong>of</strong> <strong>the</strong> financial resources available to <strong>the</strong> firm (equity and external competition<br />
<strong>of</strong> all origins).<br />
Ins<strong>of</strong>ar as <strong>the</strong> contractor will be able to adjust to each o<strong>the</strong>r, it reconciles <strong>the</strong> objectives, required until <strong>the</strong>re as<br />
antagonistic, solvency and pr<strong>of</strong>itability.<br />
Page 52 <strong>of</strong> 124
Change language