Optimization of the company's cash flow

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These cash difficulties due to the lack of synchronization between the revenue and expenditure are accentuated because of the concentration of the maturities on a very brief, very often at the end of month. If due date used to set suppliers coincides with the date of payment of wages and VAT, the imbalance of the cash will be further delivered. Two companies of the same kind and the same volume of activity which must regulate wages and V.A.T. at month-end will have needs quite different funds as providers deadline lies for one 30, and the other 10 To reduce these fluctuations in need of liquidity, the Treasurer therefore spread payments. In other words: Chooses as the settlement date of the expenditure which he has control of execution, a distant date that outputs mandatory funds (salaries, VAT, taxes, etc.), And distribute regulations suppliers’ receivables on the basis of the movement of cash receipts. The dates of settlement of suppliers must therefore be laid down taking into account other spending and revenue. In order to maximize cash, debts must be honored at their maturity date, neither before nor after. The question arises whether one has interest in paying more sooner to take advantage of a cash discount. It is difficult to give a general response, practices vary greatly according to the various branches of activities and situations. However we describe the approach of the analysis to follow, from a concrete example. If we supposed that a 2% discount is given if the payment is made within 10 days of the billing or the full amount is due within 30 days. The cost of the waiver of the cash discount is: (0.02 / 0.98) x (360 / 20) = 36.73% The discount, must be that the alternative use of funds corresponding to the amount of the debt is paid at a rate higher than 36% year for the duration of the "onerous" credit (20 days in the example). It remains to select the instrument of payment B - THE CHOICE OF THE PAYMENT INSTRUMENT. The retained payment instrument must possess three qualities for the company when it’s debtor: First, allow sprawl of payments, i.e. to avoid the pointed output and important liquidity, still expensive; Allow then the limitation of the formalization of outstanding floating ("float"), also expensive; Finally, enable to remove waste that are idle cash Page 98 of 124
Profitability is the guarantee of the credit term. In other words the fundamental financial choices - investments and their funding - condition the liquidity of the company. SECTION 1: THE CONDITIONS OF THE COMPANY’S LIQUIDITY. Any personnel responsible for the enterprise must be aware of the implications of its activity on the cash position of the company, it belongs to the Directorate General of: Promote the formation of cash flow and controlling its use; Maintain the potential for reconstruction of the liquidity of the firm. I - THE MANAGEMENT OF CASH FLOW. Cash flow that passes through the company determines the potency of man oeuvre of the firm to provided, however, that the contractor controls the training and assignment. A - CONTROL OF THE FORMALIZATION OF THE CASH FLOWS. This control is based on the knowledge of the conditions of formalization of the stream as well as knowledge of the effects of investment on the cash flow. 1 - THE CONDITIONS OF FORMALIZATION OF CASH FLOW. The investment is the source of revenues for the firm. Gold investment decisions are conditioned by: The importance of the funds committed in the operating cycle. Changes in the liquidity of the company 1.1 - The importance of the funds committed in the operating cycle. The company has from its creation of a mass of capital to finance fixed assets and the values of working capital necessary for its operation. The share of funds at all times throughout the life of the firm operating cycle limit its future investment opportunities and therefore its future income. This action is exercised through two means has any case to obtain monetary availabilities: Self-financing, with one hand, The foreign financing. (a) Restrictions on the formation of savings, i.e. the ability to self-finance. All things being equal elsewhere (production capacity not used in full, and, sufficient demand to absorb production), the cash flow of a period is limited by the volume of circulating capital that the company can stop. Indeed, this "cash constraint" determines the importance of the figure of business so the result of operation and the possibilities of self-financing of the coming period. As a result, the investment is reduced accordingly. For example, if the company can affect only that 150 to the financing of circulating capital, C = 20 + 5 x is the function of production, the maximum production will be 26 units, and, taking into account the income R = 10 x function, the maximum cash flow allowed by the available working capital fund will be: If the company gave 150 as the Capital capacity; we would write the function of Distribution as followed: F (D) C = 20 + 5x Page 99 of 124
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The Optimization of the Cash-Treasu
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FOREWORD Nor obtaining the diploma
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This project research is dedicated
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LIST OF ACRONYMS AND ABBREVIATION
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Figure n°1: Determination of the o
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TABLE OF CONTENTS Foreword ........
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SECOND PART: THE PRACTICE OF THE CA
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ABSTRACT Inside a world full of ban
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In addition, the monetary risk is a
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A good financial situation is chara
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Experience and observation prove th
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Whereas part of stocks was practica
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C = ax² + bx + c When the demand a
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The “Stocks” flow time: Average
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It indicates to what extent the rea
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RESULTS + FINANCIAL INTERESTS / FIN
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ANNUAL SALES H.T / NET FIXED ASSETS
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4 - LIMITS THE PREDICTIVE VALUE OF
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This opposition led to the establis
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It will similarly be to calculate t
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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 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: 3 ° - The Customer-Loan Control Co
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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