Optimization of the company's cash flow

andom, involved, and determine the cash receipts and disbursements. Based on these considerations many models
were built by the company’s financial managers: The Director of the Financial Direction and the Treasurer, to
determine the optimal amount of cash to hold and define its management.
If these management of cash effort are always the same fundamental objective (ensuring better safety for the
greatest possible profitability), they differ on many points: the choice of the simplifying assumptions of real business
inside the company, the use of the mathematical tools of investigation, etc. No monetary cash management model
retains all the decision factors we have previously analyzed. The inaccuracy of responses bring these models precisely
depends on the translation of data in transaction and their treatment.
The limits of the management of cash in terms of stocks.
All models responded only imperfectly to the questions posed by the resolution of the cash flow problems. Of course,
at the level of concepts and their formulation their contribution is not negligible. They have, indeed, highlighted a
number of relations, procedures, treatments and investigative tools useful in the decision-making. Thus, the cost of
idle funds and the cost of failure of cash provide two guides effective management for the Treasurer. Similarly,
optimization, simulation, and probability are other instruments at the disposal of the person in charge. However,
each model ignores some important aspects of liquidity management and focuses on others who do not fully
replicate reality. In addition, they have never been the subject sufficiently rigorous experimental verifications.
Derived from reflections on the "theory of the demand for money by firms", they are ultimately as "simple analytical
curiosities."
The analogy with inventory management models remains very limited both to explain the rational training of cash
Stock
Cash only to describe the rational realization of the financing of the cash
Supply. We will try to show the shortcomings of these management models in two respects:
That the concept of cash liquidity
And that of the financing of the cash
1 - THE CONCEPT OF 'CASH-RESERVE' RETHINK.
The increasing sophistication of the models is accompanied by the gradual replacement of the objective "optimal
financing" than "the optimal cash.
First, no empirical assay was able to demonstrate the existence of a cash incorporated for reasons of "reserve". Then
the practice business teaches that there are other means of protection against liquidity difficulties.
1.1. THE FAILURES OF ANALYSIS TO PROVE THE EXISTENCE OF RESERVES INSIDE IWACO’S TREASURY
All the analyzing work inside the treasury tend to show that the level of cash is function of the rate of interest and
the volume of transactions. More specifically, the demand for money would vary inversely to the rate of interest and
would be subject to economies of scale.
1 - The nature of the project research on the demand for money.
While I was making this project inside the company, I tried to analyze the typology of work that is done inside the
treasury department and compare it with all the academic knowledge that I have learned, then I came to the the
conclusion that many sectorial studies attempted to prove the existence of economies of scale in the detention of
liquidity as well as its relationship to the rate of interest.
Page 58 of 124