Cash Management
Cash Management
Cash Cycle Factors that influence the desired level of cash Optimal cash inventories Short-term investment strategies
The Manager
Managing an entity’s Resources
Cash Management Inventory Management Working Capital Management Investment in Human Capital Long-term Assets Accounts Receivable
Resource Decisions
Investment Decisions Operating Decisions Human Resources Decisions
Life cycle effects, Business cycle, public events, etc.
Recruitment, Selection Training, Productivity Performance Appraisal Compensation Unions & Labor Relations
Cash Inflows
Value Creation
Information Decisions
Economics of Information Database Management Data Modeling IS Planning & Development
Discount Rate
Financing Decisions
Debt vs. Tax Financing
Cost of Capital
Financial Markets
Overview
ST fin’l planning = deals w/ short-lived assets and liabilities (working capital management); concerned w/ 1) size of investment in CA like cash, A/R, Inventory…a tool is cash budget analysis and 2) how to finance ST assets…a tool is performing credit analysis
Managing WC involves determing:
• How much to invest in CA? - CA vs. FA - Nature of activities/programs
•
In each CA? - Cash, A/R, Inventory - Cash Mgt - A/R is Credit Mgt - Inv = POM & Cash balance models
Our objectives
• Learn about the Cash Cycle • Understand the factors that influence the desired level of cash • Learn two models that calculate the optimal level of cash • Gain an overview of what factors/areas are inputs to a cash budget and how they affect the cash balance
Objectives of Public Money Managers
Bringing the entity’s cash resources within control Achieving optimum conservation and utilization of the funds
Key areas of Public Cash Management
Organization Collection and disbursement of funds Netting of interagency payments Investment of excess funds Optimal level of cash balances Cash planning and budgeting Bank relations
Treasury Management
Cash Cycle Factors that influence the desired level of cash Optimal cash inventories Short-term investment strategies
The Manager
Managing an entity’s Resources
Cash Management Inventory Management Working Capital Management Investment in Human Capital Long-term Assets Accounts Receivable
Resource Decisions
Investment Decisions Operating Decisions Human Resources Decisions
Life cycle effects, Business cycle, public events, etc.
Recruitment, Selection Training, Productivity Performance Appraisal Compensation Unions & Labor Relations
Cash Inflows
Value Creation
Information Decisions
Economics of Information Database Management Data Modeling IS Planning & Development
Discount Rate
Financing Decisions
Debt vs. Tax Financing
Cost of Capital
Financial Markets
Overview
ST fin’l planning = deals w/ short-lived assets and liabilities (working capital management); concerned w/ 1) size of investment in CA like cash, A/R, Inventory…a tool is cash budget analysis and 2) how to finance ST assets…a tool is performing credit analysis
Managing WC involves determing:
• How much to invest in CA? - CA vs. FA - Nature of activities/programs
•
In each CA? - Cash, A/R, Inventory - Cash Mgt - A/R is Credit Mgt - Inv = POM & Cash balance models
Our objectives
• Learn about the Cash Cycle • Understand the factors that influence the desired level of cash • Learn two models that calculate the optimal level of cash • Gain an overview of what factors/areas are inputs to a cash budget and how they affect the cash balance
Objectives of Public Money Managers
Bringing the entity’s cash resources within control Achieving optimum conservation and utilization of the funds
Key areas of Public Cash Management
Organization Collection and disbursement of funds Netting of interagency payments Investment of excess funds Optimal level of cash balances Cash planning and budgeting Bank relations
Treasury Management