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In this course we talk about the corporate cash management process.   

We start with a review of the daily cash positioning and will examine the activities which shape the total company cash position. A natural extension of the cash positioning process is the cash forecast and we introduce this process as well. 

We review the options for funding, if your forecast indicates you need it, and the options for investing any excess cash to optimize the return from it while minimizing the risk and preserving liquidity.

The goal of the course is to present suggestions with their pros and cons and offer practical tips to help you customize the cash management process for your own organization.  

This course is designed to interest a wide range of finance professionals. Those with limited experience in cash management will find the topics covered helpful to establish their own cash management function. And those with experience may hear ideas for improvement of the existing process.  

Intro Video Transcript

Hello everybody and welcome to today's webinar Cash Management Overview. My name is Veselina. I have multiple years of Post MBA experience in corporate treasury with different companies, most recently six years we Yahoo, managing the company's multi-million investment portfolio and share repurchase program were among my responsibilities. I'm glad I have this opportunity today to share with you what I learned about cash management the last few years. My focus will be on the practice go aspect and I'm hoping I'll presented learnings, recommendations and tips that you find helpful for your specific case. So here is what we're going to talk about today. We are gonna start with the steps of the cash management process- cash positioning, cash forecast, fundig and investments and how to define whether you're gonna need funding or you may need find good investment for your cash. We gonna learn how to develop the cash forecast which will help us define whether we need funding or you may need to invest excess cash we gonna talk about the available options for funding and how to make the best decision for your company and finally we're gonna learn how to divide total cash into different layers with different characteristics and how to design an optimal investment strategy for every single layer. Since gonna talked a lot about cash management today I thought it would be a good idea to start with a review of the goals of the cash management. First of all, the Goal cash management is to maintain appropriate cash availability at any point of time, than in case your projections show that you're not gonna have enough cash in the future that the goal, your goal should be the goal is to ensure that you secure access to funding at the lowest total cost, in case your forecast shows that you're gonna have excess cash then the challenges is to invest this excess cash generated return and maximize this return while minimizing the risk associated with this investments. Unfortunately there is no universal solution for cash management that's gonna work for every single company because the reality is that the cash management for each company depends on the dynamics of the company's business depends the dynamics of the cash inflows and outflows it depends on the company's structure and maturity and so on then at the same time it also depends on the current and future market environment and it also depends on the risk tolerance of the management team. So to summarise there are a lot of factors that define the cash management for every company and the purpose of today's conversation would be to provide recommendations that there're gonna be applicable for everybody just please take this warnings and recommendations and applying them for your specific case. I'm certainly hoping you'll find all of them helpful. So, let's start with a review of the cash management challenge. On these light I show just something that you probably very familiar with. This is what happens on a daily basis perhaps your bank account and I have two examples. On the ground at the top I have an example of they want when you collect cash from clients or some other sources then you make couple of payments than at the end of the day, it happens that you have excess cash in your bank account. This is scared that you don't need to have in the bank account because you're not gonna get any return from it. So, you probably transfer this excess cash to something that will now I call cash storage. Then the example in the bottom, we have a differently when you again collect some cash from clients then you make some payments, but it happened that you made a payment of $20 which resulted in a negative balance at the end of the day you know the words given the flows during the day it happened that you're not gonna have enough cash in your bank account to cover all the payments and in this case perhaps you gonna access these cash for each and you're gonna transfer funds from the storage to your bank account because I am sure you all know that you should always have enough cash in your bank account to cover all of the payment and the bank should never be negative. So now let's look at the same activity, the same cache storage but long-term. So you can see that all these daily net cash bounces negative or positive, a fact cash storage. When you have positive bounce, this increases the cash storage, when you have a negative bounce and you transfer funds from the cash storage in the bank account, the cash storage size decreases. So, I need to make a note here that the size and the form and the form of the cash storage, of course I am gonna give you significantly from company to company. Some company generates a lot of cash. For these companies the cash storage is gonna be much larger. For these companies the real challenge actually is to find a way to invest all these excess cash and generate return because otherwise it's a lot of opportunity. For other companies that don't generate so much cash on a daily basis than the cash storage is going to be much smaller and for them that the challenge would be to make sure that they always have cash available and if they projected they're not have enough cash than to find a way to secure funding at the lowest cost possible. I also have something I call minimum level. So that that's the minimum level of the cash that Treasury need the maintain in any point of time to make sure that all of the payments can go through and really the key challenge, one of the key challenges actually of cash management is to define whether these minimum level is because what is important to know where the minimum levels right now but what's really more important is to be able to evaluate where these minimum level should be in the future. Having said that its lead out to the top be cash forecasting.

Learning Objectives

  • Identify the steps of the cash management process - cash positioning, cash forecast, funding and investments
  • Determine whether you need funding or need to invest and how
  • Idendify available cash management options, how to compare them and how to make a decision
  • Assess how to divide the excess cash into buckets with different characteristics and how to design optimal investment strategy for each bucket
Last updated/reviewed: March 29, 2018

29 Reviews (90 ratings)Reviews

4
A very good overview of cash management. Forecasting, funding and optimizing returns are handled in a way that finance people taking this course, whether in a large business or small can utilize the concepts. Only criticism is that Ms. Dinova should have used slides as visual cues when she gave numeric examples in some of the chapters.
2
Anonymous Author
Very basic overview. Lots of repetitive comments with very few helpful suggestions. For example, could have gone over cash investments, such as T-Bills vs. commercial paper, risks of breaking the buck, what fees could be negotiated against a low bank return, etc.
5
Anonymous Author
Very good overview of cash management from a practitioner perspective. Good insight into the fundamentals of cash management and how "cash" should be viewed and its relationship to the choices of investment instruments.
5
Member's Profile
Instructor's efforts in transfering the practical knowledge highly appreciated. Although, passed the course in first go but would still like to listen to her as she shares her experience at Yahoo treasury.
5
Member's Profile
I think the presenter did a great job using graphs to illustrate key terms and methods of cash management. The presentation was organized well and provided good summary points on each topic covered.
5
Member's Profile
Good Course. Simple presentation. No surprises. Any person who has newly assigned responsibilites for cash management will benefit from this course.
5
Member's Profile
The presenter breaks down the process into easily describable sections, and discusses each section with plenty of clear examples and terminology.
5
Anonymous Author
I thought the content of the course was good, especially since it is an Overview of Cash management. It provided a very concise overview.
4
Anonymous Author
Well covered. Initially a little challenging with Veselina's accent, but easy to overcome as the course was content rich
4
Member's Profile
Good intro for someone new to cash management. Real examples or business cases would enhance content.
5
Anonymous Author
Helpful to break cash into categories and use different strategies for the type of funds available.
5
Anonymous Author
Great overview of cash management. I highly recommend it for those who are new to Treasury.
4
Anonymous Author
This course provides a simple road map to follow for corporate cash management.
5
Member's Profile
Aspects of cash management explained in a clear and concise manner.
3
Anonymous Author
Good for beginners, but nothing new for Treasury Professionals
4
Member's Profile
nice visual breakout of Operating, Reserve and Excess cash
4
Member's Profile
A really good overview of cash management. Recommended.
4
Member's Profile
The presentation is simple but very comprehensive.
4
Anonymous Author
Very good, simple overview of cash management.
4
Member's Profile
Thank you very much for the valuable course.
4
Anonymous Author
Very good details on cash management basics.
4
Anonymous Author
great course! structural and informative
Member's Profile
Good overall content as an intro course
4
Anonymous Author
Great overview. Recommend the course.
4
Anonymous Author
Good overview of these concepts.
4
Member's Profile
Good intro course
5
Anonymous Author
Great course.
3
Anonymous Author
Basic course.
4
Anonymous Author
good info...

Prerequisites

Course Complexity: Intermediate

Prerequisite: Exposure to corporate finance

 

Advanced Preparation: None

 

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
Introduction and Overview
Forecasting
  8:28Cash Forecasting
  6:54Funding
  7:54Optimizing Returns
Cash Layers
  6:10Operating Cash
  12:21Reserve Cash
  7:43Excess Cash and Conclusion
Continuous Play
  56:36Corporate Cash Management Overview
Supporting Materials
  PDFCash Management Glossary/Index
  PDFSlides: Cash Management
Review & Test
  quizREVIEW QUESTIONS
 examFINAL EXAM