Optimization of the company's cash flow

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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. Page 54 of 124
Anyway many authors have developed models of management relating to so-called 'transaction' cash, either to socalled cash of "precaution". Cash transaction is directly attached to the operations of the operating cycle, while cash's caution is justified by unforeseen and significant expenses having a character of protection against depreciation, losses and risks. B - THE ESSENTIAL VARIABLES INVOLVED IN THE DETERMINATION OF THE OPTIMAL AMOUNT OF CASH. We examine successively the following five decision factors: The nature, behavior and the volume of cash flows. Revenues and transaction costs, related to the securities. The length of the cash flow’s forecast period. The value of the minimum balance critical cash. The cost of breakdown of cash. 1- THE NATURE, BEHAVIOR AND VOLUME OF THE CASH FLOWS. A portion of the cash flows for the budgeted period is the result of decisions taken by officials of the firm during this period; another part is generated by decisions taken during previous periods. Naturally the Treasurer will honor all expenses incurred by the managers within their budget, even though cash must fall below zero. There is a category of cash on which the Treasurer has no control. Similarly, payments of claims by the customers, as well as sales in cash during the period, represent receipts on which the Treasurer has no power. Such financial flows correspond to a type of transactions to which the attitude of the Treasurer is purely passive. On the other hand, two sets of transactions are normally controlled by the head of the Treasury. These are, firstly, shortterm loans and their repayment, and the purchase and sale of securities. Therefore, at the level of cash INFLOWS, we can distinguish three kinds of financial transactions: Loans’ reimbursement and repayment of short-term funds; Purchases and sales of securities; All other transactions. The first two are controllable by the financial controller; the third, on the other hand, is sustained and sometimes even random. Consequently four groups of financial transactions will play on the level of INFLOW cash: Loans and repayments of funds lent to short term (non-random flow); Purchases and sales of securities (non-random flow); Other random transactions; Other transactions. The first two groups will be tools for balance between the hands of the Treasurer. 2 - TRANSACTION COSTS AND REVENUES ASSOCIATED WITH THE "SECURITIES". Treasurer who behaves rationally, is expected to invest its funds that are Free of any sort of engagements in the form of "investment securities" (or even in the form of escrow account in Bank). These values should have the characteristic to be bought and sold quite quickly and quite easily, and a probability of low loss. Transaction costs relating to the purchase and sale of the securities represent a small percentage of the amount of the transaction. But these costs can be higher than gross income whereas, especially if the period of detention of the security is short. In Page 55 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
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 and 52: These three presentations are well
Page 53: Manage cash consists, in the tradit
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
Page 103 and 104: 2.2 - The influence of investment o
Page 105 and 106:
There are thus two sets of 12 month
Page 107 and 108:
S = The starting stock (possibly) +
Page 109 and 110:
This chart is reserved to make clea
Page 111 and 112:
operation wasn’t beneficial enoug
Page 113 and 114:
50% is paid to the supplier 14 days
Page 115 and 116:
Figure n°18: Daly Balance of IWACO
Page 117 and 118:
Regarding the previous chapters, an
Page 119 and 120:
THE CONCLUSION Page 119 of 124
Page 121 and 122:
Investment and its financing, Trai
Page 123 and 124:
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