Optimization of the company's cash flow

A - Grounds for cash, and the formalization of a monetary stock.
1 - THE REASONS FOR DETENTION OF LIQUIDITY.
Expressed in terms of financial management these reasons can be defined as follows:
1. The transaction pattern meets the daily needs of funds, in order to address the professional exchanges
caused by the cycle of exploitation (supply, production and marketing expenses), and the payment of
financial charges, taxes and dividends.
2. The precautionary reason justifies the cash intended to deal with the unpredictable expenses such as those
resulting from fires, accidents, trial, decrease of activity, etc.
3. The reason for funding is the reason for the accumulation of funds to undertake a major expense, such as an
investment.
4. The reason for speculation, finally, responds to the concern to take advantage of a momentary advantage
(advantageous investment, the market, information requirements, etc.).
These cash requirements will be all the less important that the forecast of flows will be less uncertain. Similarly, the
ability to borrow at any time also reduces the need to keep cash. Finally, we know that it is not useful to keep all of
the cash in the form of immediate cash. A party may be held in the form of "investment securities".
The Keynesian approach of the preference for liquidity is now widely adopted by financial companies. Hold a stock
of currency to ensure against the lack of synchronization between the inflow and outflow of funds flows.
2 - THE FORMALIZATION OF THE MONETARY STOCK.
It is precisely because these flows are naturally purchase that the company must provide a pool of means of
Exchange. The origin may be the result of a phenomenon or event known, random, or ignored by the Treasurer. In
those circumstances it must be able to have funds at the appropriate time to respond to different types of stress
resulting:
Either, commercial or industrial operations which he did not control,
Either of financial transactions which it has not always control.
The Treasurer will organize its intervention from three forms of cash:
Immediate availability,
Securities of investment
Bank credit in the short term.
3 - THE STRUCTURE OF CASH.
The composition of the cash depends on the grounds for detention of liquidity. In this regard we note that a portion
of the cash to a character of 'reserves' and it has three main destinations: to face big spending some to be carried
out in the immediate future (pattern of funding), enable the company to benefit from the investments (basis of
speculation), and respond to unpredictable expenses (reason for caution) without delay.
"Transaction" cash is more difficult to grasp. Indeed, if meant by 'transactions' series of financial flows generated by
current operations, it must be admitted that the nature of these transactions varies one firm to another. It is the
financial officer responsibility the task of defining the concept of "transaction" on the basis of its own goals. In fact,
the limit is not as sharp between the different types of balances economic literature can be implied. The idea of
'reserve' is present in the pattern of transaction.
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