Optimization of the company's cash flow

Regardless of the type of uncertainty facing the Treasurer, he will always find in the statistical arsenal the adequate
methodology, or classic, is more elaborate. But the Manager must ask itself if it is important to know the actual date
of the expenditure or the upcoming recipe today.
1 - SENSITIVITY ANALYSIS.
It comes to know if knowledge of the date of completion of an undertaking would change how either the decision to
be taken today. A "sensitivity analysis" allows to know if an optimal decision is affected by an interval of uncertainty
related to the value of a parameter of the template. If the optimal decision is sensitive to extreme values of the
parameter should be approaching the exact value of the random factor. In all cases it should be to balance the cost
of obtaining more accurate information and the profits or savings it is hoped to remove.
Two characteristic examples of many situations experienced by corporate treasurers will allow us to illustrate this.
1.1 - Analysis of relative sensitivity to the cashing of checks issued.
This example deals with the impact of uncertainty as to the date of receipt of a check issued on the decision to supply
timely bank account. So a company that goes or comes to issue a check in favor of one of its creditors has two possible
attitudes: either supply his bank account in an amount equal to the value of the cheque, or wait for overdraft notice
to complete the transfer.
The cost of the first solution can be expressed simply as a function of the form y = an x. In effect, if the amount of the
cheque is 100 SFR and the average interest on the 10% market rate the opportunity cost of idle cash thus formed is:
C = 33.000.000 (1+5.35%) / 360 = 96570.83333 DHS
Where x is the number of days between the issuance of the cheque for his collection (admit that x ranges from 0 to
30 days). The graph below illustrates this feature:
10
8
6
4
2
0
10 20 30
Figure n°9: The variations of Idle cash’s Costs over periods
The second solution at the fixed costs proven as followed: The Company while waiting the overdraft of 33.000.000
DHS, supports by the gaming of Value dates and deadlines of 6 to 10 days of financial costs. If we considered an
average or 7 days at 14%:
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