Optimization of the company's cash flow

Recommendations

Info

2 - THE FEAR OF THE DEBIT BALANCE. A second generator cause of unused funds lies in the attitude of the company with regard to the overdraft. Fear of the overdraft is for these companies to three main reasons: The fear of being forced to use the more expensive short-term credit because it’s the quicker; The fear of antagonizing his banker by this unexpected funding requirement; The fear, ultimately giving birth to rumors about the financial soundness of the firm. These concerns are so vivid that they grow to stop after have mobilized them, of large cash surplus. This behavior is sometimes erected in the company where retain permanently a bank balance very much positive. In any case, it is a sign of poor control of cash: the person in charge will cover, as a security, well beyond its real needs, it cannot assess with rigor. In these circumstances it is for the company to borrow money from his bank and to put free part at its disposal. In addition to the shortfall, in opportunity cost, these bank balances cost weighted average rate of the capital, or "cost of capital". 3 - THE IMPORTANCE OF UNUSED FUNDS AND ITS CONSEQUENCES. Any unspent funds affect the profitability of the firm. In addition, they do not represent a sufficient guarantee of solvency. 1 - Statistical Evaluation of unused funds. This is to give an order of magnitude of the phenomenon in terms of proper idle cash as the "float". a) Assessment of idle cash. We can appreciate the importance of the sums of money on the company’s account, "banks and postal check", and therefore unnecessarily financed, by examining the value of this position on the balance sheet synthetic and summary of the accounting data of IWACO subject to the regime of the actual profit. Can also measure the importance of unnecessarily funded funds by looking at the balance sheets of major French banks of deposit, under the heading in the passive: "accounts of enterprises. Table 10 below, brings together the accounts of the company, contained liability side of the balance sheet of the Bank of the company. These idle balances properly say, ads "float". The percentage presents the amount of the account from the global amount of inflows that the company had in its inflows. The BMCE is not officially activated. The following table gives example of the company’s Inflows during 2014-2015, Table n°9: Inflows of IWACO during 2014-15 PERIOD AWB BMCI BMCE January – 2014 0,00 DH 1 198 960,66 DH Not Yet February – 2014 184 572,00 DH 1 688 230,79 DH Not Yet March – 2014 0,00 DH 3 836 491,74 DH Not Yet April – 2014 0,00 DH 2 721 775,26 DH Not Yet Mai – 2014 0,00 DH 2 016 630,32 DH Not Yet June – 2014 0,00 DH 1 277 555,14 DH Not Yet July – 2014 0,00 DH 669 941,79 DH Not Yet August – 2014 0,00 DH 2396 546,75 DH Not Yet September – 2014 0,00 DH 2 159 968,79 DH Not Yet October – 2014 0,00 DH 1 817 837,55 DH Not Yet November – 2014 0,00 DH 957 697,73 DH Not Yet Page 78 of 124
December – 2014 0,00 DH 1 599 918,69 DH Not Yet January – 2015 1 225 382,50 DH 1 934 877,27 DH Not Yet February – 2015 0,00 DH 1 832 762,91 DH Not Yet March – 2015 0,00 DH 1 784 262,03 DH Not Yet April – 2015 37 711 489,31 DH 1 908 717,17 DH Not Yet Mai – 2015 5 600 000,00 DH 1 589 353,22 DH Not Yet June – 2015 0,00 DH 1 647 097,19 DH Not Yet July – 2015 250 000,00 DH 2 411 563,82 DH Not Yet August – 2015 0,00 DH 3 264 040,43 DH Not Yet September – 2015 0,00 DH 1 761 230,68 DH Not Yet October – 2015 0,00 DH 4 387 229,87 DH Not Yet November – 2015 0,00 DH 1 344 279,52 DH Not Yet December – 2015 0,00 DH 1 553 395,28 DH Not Yet b) Assessments of the « float ». In our country the average time of recovery of funds is of the order of 7 calendar days. 2 - Unused funds affect the profitability of the firm without ensuring the solvency. It is obvious that for a given benefit, the volume of cash is important and more the profitability of the company is low. Added to this is the value of the "float" which, although not recorded, inflates the volume of unused funds, and thus decreases the real rate of return. Thus, by 2015, the company being subject to the regime of the actual profit had total assets of 906 385 876, 60 million dirhams. With a rate of return largely exceeds 15%. In fact, the real rate of return, taking into account the "float", was to: F = 7 x (906 385 876, 60 / 365) = 17 382 742, 84 Therefore, the main objective of evaluating the “float” of a company, is to evaluate how fast the money of the company circulate inside and outside the market. Nevertheless, we often take for granted having liquidity inside the company as a symbol of security, profitability and solvency. Yet, having money stocked just like that inside the company’s treasury is the same messing opportunities of recycling these money inside a good business running outside in the market. The evaluation of the market is same as evaluating the market’s opportunities for making profit. Although, this evaluation wouldn’t be compatible to this project if it wasn’t gathered with the company’s money study and evaluation. Though, gathering both means that the company is a positive situation to catch the god opportunities that the market can give and be aware of the positivity and negativity of the market, and it is for this specific reason that we’re going to study the costs that the “Sleeping money” could take on charge on the next paragraph. Finally, as we mentioned earlier, note that the existence of a positive cash cannot be regarded as the pledge of the solvency of the firm. Indeed, the concept of cash is a static, while the liquidity of a business depends on the conditions in which the availability and liabilities will arise the relation to each other in time. Cash management is essentially dynamic and requires an analysis in terms of flow. It is the potential to restore liquidity of the firm, determined by its profitability and solvency, which is the only guarantor of its solvency and to its security. Page 79 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 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 and 76: B. Dynamical competition While the
Page 77: 1.2 - The existence and the importa
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
show all

Optimization of the company's cash flow

Create successful ePaper yourself

Delete template?

Save as template?