Optimization of the company's cash flow

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SECTION 1: INFLOWS GLOBAL MANAGEMENT Excess cash translates into cash idle source of opportunity costs. Moreover, sleeping money involves financial costs. It is financed by funds that have a cost to the company. When cash is on deficit, is generally filled by bank credits. Manage its cash flow is to strive to make the balances of the company in each store also nearby zero as possible. As for the company, IWACO’s considered a first distributer for the INWI mobile operator, for which activity, the company benefits from two credit lines, one in the BMCE bank and another one in AWB bank; yet the problem arrives when the company compares the INFLOWS stocked in the two banks and come out with the conclusion that the banks which benefits from the more than 50% of the IWACO’s turnover is the same bank that offers less credit in the company’s bank account , For this purpose the financial manager must: Firstly, detect and remove all waste through better knowledge of cash flows; Secondly, assess the conditions granted by the banks to the company and enter into any new negotiations. I- The control of cash flow and cost savings. Treasurers few know precisely the value and the behavior of the cash flows. This ignorance leads to the formalization of idle cash hardly noticeable at first sight. The company supports "the unnecessary cost of money who sleeps” by the fear of the “Overdraft” or the Credit Line. These funds are at the origin of a huge waste of financial expenses. To improve the management of its cash in the short term, the company shall keep accounts "in value dates. A - FORMALIZATION OF IDLE CASH. The bank balances too approximate knowledge coupled with the fear of the debit balance causes the formalization of idle cash. 1 - THE LACK OF BANK BALANCES. Banking movement’s accounts held by the company 'in dates of operation" mask the existence of funds unused cash and transit ("float"), generating costs. 1.1 - Accounting is held "in dates of operation”. Indeed, the Treasurer records in its books variations bank balances at their date of posting and not of occurrence. Thus in the case of a supplier paid by check, the check issued a given day will be counted in spending at its date of issuance. In fact, the Bank will discharge the company’s account unless two days pass after presenting the check to the bank 'two days of Bank": this is the value of the transaction date. Furthermore, usually the creditor doesn’t present immediately this check for collection; this will increase the gap between the trade date and the value date; yet, for the IWACO case, the suppliers present immediately the check for discharge in banks and then same do them. The Treasurer of the company therefore tends to underestimate constantly balance Bank. The first phenomenon led to "oversize" its use of bank financing and let develop idle cash. The importance of the "float" exacerbates this situation. Page 76 of 124
1.2 - The existence and the importance of the "float". We understand, from what has just been said, that the "float" represents all of the funds in transit. They are indeed at the company, but cannot be used because they are temporarily stuck in the banking system during the recovery process. Figure n° 4, shows the formation of the "float". The amount of the "float" can be calculated in the following way; either: F the amount of float, T the recovery time means (for the debtor or creditor) in days, CA annual turnover, F = T x (CA / 365) In percentage of the Turnover: F = (T / 365) x 100 For example, if the time of the average recovering is up to 8 days: F = (8 / 365) x 100 Equals to 2.19 % of the Turnover. Page 77 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:
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Page 9 and 10:
This project research is dedicated
Page 11 and 12:
LIST OF ACRONYMS AND ABBREVIATION
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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 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: B. Dynamical competition While the
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: BOOKS: http://tel.archives-ouverte
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